Four Key Business Decisions

Four Key Decisions – People, Strategy, Execution, Cash

by Craig Janusz – Strategic Solutions Enterprise

depositphotos_10280486_m-20

As 2016 comes to an end many companies have experienced growth and improved profitability this year. I hope you have had success this year and are preparing for 2017.Our economy has slowly recovered from the set back early this century, despite the gridlock of our government. I hope the new administration will recognize the importance of businesses being the catalyst for a growing economy and avoid policies that undermine their success.

In turn, business leaders must continue to find ways to grow their businesses in 2017, despite the turbulent times, so here are some thoughts to help you.

Decisions and Success

Businesses must focus on four key decisions in growing their business and must get these decisions right or leave significant revenue, profits and resources on the table. These four decisions are in People, Strategy, Execution and Cash. Every business faces continue challenges in all four areas, at any one time, yet businesses must prioritize which areas overshadow the rest going into 2017. Therefore the business leaders first decision is to choose which one of the four areas they need to focus on as they enter 2017

People Decisions

If you are not enjoying running your company or having drama that cause execution issues, you know you have People challenges. You might have a partner issue, a customer relationship that dominates your resources, trouble with key employees or teams that are dysfunctional that disrupt the business effectiveness, you might have trouble finding employees to serve your customers.

Prioritizing and solving these relationship issues should be your top priority for 2017, or they will continue to consume a tremendous amount of your time, energy and make it difficult to focus on the other three main decisions. Focus on getting the right people to do the right things with clear accountability and metrics and you will be on your way to freeing up your energy to grow and enjoy your business in 2017.

Strategy Decisions

Slow, erratic, unpredictable top line revenue growth is an indicator that your business faces a strategy challenge. Your strategy needs to be articulated so that everyone is aligned on the same page, without wasting sales and operational energy chasing activities that are not useful to the business.

Jim Collins author of Good to Great refers to this concept of articulating your company’s strategy that defines what you are the best at in the world, what drives your economic engine and what you are deeply passionate about. It’s your unique selling proposition (USP) that differentiates you from your competitors. You know you nailed it when revenue grows as rapid as you predictable wants.

Execution Decisions

Execution challenges occur when your profits do not grow exponentially as your revenue grows. Too often businesses grow without developing the effective habits and discipline needed to develop organization structure, communication, processes to convert increment revenue growth into experiment profits growth.

Indication of poor execution cause businesses to waste employee’s resources in delivering products or services that are not inclemently improving profits. Organizations begin to rely on the heroics of their people to keep the business going, organization drama occurs and profit margins begin to erode.

By steeping back from the business and focusing on the business execution challenges based upon solid execution discipline and habits, you can dramatically improve gross margins, profits, eliminate organization drama and improve employee morale.

Cash Decisions

The last challenges every company will face is finding enough cash to grow their business. It is simple fact that growth “sucks cash “. What separate successful business is they understanding of cash flow and the importance of managing this resource. Cash is the oxygen that drives your business engine. With it, you can continue to scale up your business, without you will stall and die.

We strongly recommend at a minimum all businesses do a rolling 12-month cash flow projections to anticipate future cash requirements, know you cash conversion cycle and be actively working on ways to improve cash flow.

Your Decisions

Now it’s your time to decide. Which of the four key decisions will be your primary focus? Companies that have the right focus moving forward will continue to grow and prosper.

If you would like a free organization assessment based upon these four key decisions that will assist in planning you future: Click Here

Companies That Embrace Innovation Will Succeed

execution

The Lean Learning Center reviews organizations that have embraced change and stood the test of time.

In our article about the importance of innovation and creativity to an organization’s success, we discussed the average lifespan of an S&P 500 company: The average lifespan has declined from 61 years in 1955 to 18 years in 2014. However, not all company lifespans are getting smaller… Some companies are displaying remarkable staying power, celebrating over 100 years in existence.

Companies over 100 years old:

1802 DuPont and Company
1806 Colgate-Palmolive Company
1837 Procter & Gamble
1866 Sherwin-Williams
1872 Kimberly-Clark Corp.
1876 Eli Lilly and Company
1883 PPG Industries
1886 Johnson & Johnson
1888 Libbey Inc.
1888 Hubbell Inc.
1894 The Hershey Company
1896 Tootsie Roll Industries
1898 Goodyear Tire & Rubber
1899 Timken Company
1902 3M Company
1903 Harley-Davidson Motor Company
1903 Ford Motor Company
1903 Anderson Corporation
1905 Ingersoll RAND Company
1906 Xerox
1911 IBM Corporation
1911 Whirlpool Corporation
1913 Clorox Company
Why, then, do some companies grow while others cease to exist? Are there characteristics in common among organizations that last? We would like to suggest that the answer is YES. Companies that stand the test of time are able to do so because they change with the times. When it comes to modernization, it’s either adapt or say goodbye!

“Having a product or service that continues to adapt to the needs of customers is paramount to making a company successful in the long term,” says Michael Zinsser, a partner in the Boston consulting group.

A key part of fostering innovation within an organization is the ability to engage and empower the workforce. When employees feel good about the work they do they believe that the firm is investing in them, as well as providing opportunities to contribute to the organization success. We find those companies that are able to create that loyalty and engagement are able to withstand a lot of external shocks and work together to keep the business going.

The Lean Learning Center is proud to note that at least eight of the companies over 100 years old are also our clients. We can help any organization foster innovation and creativity. Contact us for more information about how fostering innovation could change the future of your company.

Lean Learning Center – Troy, Michigan

The Lean Learning Center was founded in 2001 to address the gaps and barriers that are holding back companies from successful and sustainable lean transformation. In addition to the advanced curriculum, the Center has developed a learning environment designed specifically for adult learning utilizing techniques that include discovery simulations, case studies, personal planning, and reflection – ultimately engaging people at a deep and personal level. We bring our unique lean understanding in creative ways to executives, managers, supervisors, change agents and front-line employees.