When you are a manager or business operator with poor results, it's always easy to find reasons beyond your control to use as justification. But this "Blame Game" is for amateurs. The author provides 3 suggestions which will improve performance in your business almost immediately.
The recent news of General Motor's expected loss of over $1.1M in the first quarter of 2005 surprised many observers. It reminded me of something GM's previous chair, John Smale, had told me back in 1994. We were having breakfast in Toronto when he made some observations about business which have stuck with me ever since.
Smale was a brilliant guy and the former chairman of P&G before GM. He understood brand marketing and managing huge operations. I was privileged to be able to spend time one-on-one with him and remember it well. He'd remarked that large corporations, in addition to making money, have an obligation to other stakeholders as well. I took that to mean that he felt it was inevitable that an org like GM would occasionally have periods with losses, and that during such times it had to keep as many other commitments to employees, or suppliers, or other stakeholders, as was feasible. I believe his comment was enlightened. It bears consideration again for the world's largest automaker.
In my experience, there are 3 key opportunities that business managers and operators miss when they fail to achieve maximum returns and benefits from their investments. As both a business success coach and a management consultant; I see these overlooked repeatedly It's almost ironic, given that one of the most frequent complaints I hear from business operators is about their perceived inability to optimize resources due to a lack time to get everything done each day. Here are 3 quick ideas which, if dealt with effectively, will give many business managers an immediate lift in their results:
1. Don't Buy a Dog and Then Bark Yourself
This problem impacts all managers; but it can be less obvious in large corporations where the large headcounts make poor delegation skills less likely to cause a business to fail.
Over and over again I see managers hiring 'in their own image'. I think it's based on the idea that, "there's nothing wrong with this operation that more of me couldn't fix".
Let me be clear on this - Don't! It's a waste of money; and even if you like having 'yes men' around you - it's a waste of everyone else's time. When hiring, always try to find someone smarter than you. Look for someone who brings new skills to your team, someone with fresh perspective. And then let her or him loose on the tasks at hand.
Don't micro manage your new hire and tell her/him how to do their job. It will only cause 'reverse delegation' with all decisions and needs being sent to you before any action is taken. And if you're the one making every decision; you've just lost a big part of the benefit of bringing in new talent. Your time management ability for other issues is worsened as well.
2. Do an ROI Analysis on Every Spend
By now we've all heard that most new businesses fail because of under-capitalization issues.
For all enterprises, effective use of working capital is critical to success. However, if you are running a small operation with limited funding, poor usage may be the principal reason why you're trending toward failure.
Many business operators just don't make the effort to review the results of investment spending adequately. The importance of an objective analysis of what - if any - return came as a result of their spending is critical for any future business planning - and yet it's continually ignored or postponed to a time when it's no longer valuable. I recognize it's difficult to determine (for example) what marketing activity actually caused increased traffic; or what discount offer caused your phone to ring, or if adding 3 bodies actually improved company output. But failure to determine whether your investment was appropriate will only result in further blind spending.
Management-by-gut-feel often results in no positive outcomes. Test yourself.
3. Usually, Your Results Aren't Due to the Economy
When I first became involved in the franchising business back in 1985, the biggest problem I saw was that small business operators didn't understand the effects that the global economy could have on any business dedicated to consumers. Today, it seems it's just the opposite.
I frequently hear business operators justifying their lack of success on everything but internal company issues. I don't believe that most businesses fail to make their numbers because of some prognostication from the Federal Reserve Chairman.
Sometimes we can get so wrapped up in global issues that we forget why our customers came to us in the first place. We forget that they will continue to spend and grow regardless of what happens in Japan or Poland.
Deal with the issues that are really creating your current results.
Unless your operation is doing everything to the best it can be done, look in the mirror before you start blaming the economy, or issues outside your control for your lackluster results.
And by the way, Toyota's making more money and growing its market share in the US despite all being faced by those obstacles cited by GM's management this year. It's not the economy.
If you thought this article was worthwhile, you many want to take a free 7 part mini coaching course, “7 Secrets of Leadership Success” by signing up at http://www.BusinessSuccessCoach.net
John McKee is the visionary behind BusinessSuccessCoach.net, the premier online coaching service for business people and professionals at all levels. During his over 25 years as a senior executive in businesses across North America, he personally hired, promoted, and fired literally thousands of people. Now, as a business coach, McKee uses the phone to coach others to become more successful using field tested approaches.