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Master the Basics of Business

I’ve seen it more times than I care to…a company develops a great vision of growth, begins following through with that plan for growth and then suddenly it all comes to a grinding halt because the company doesn’t have the processes in place to support the growth. I think if I use a sports analogy the idea might be clearer. All football teams have a playbook. This book includes those plays that the team expects to run. Each play details the responsibilities of each offensive player; where they are to go and what opposing player to block. If each player is able to complete their task successfully, more often than not the team will be able to move the ball downfield. Offenses can be complex or relatively simple, but one characteristic is absolutely necessary for the team to be successful…the team must be able to block, throw, catch and run. Without these basics, the team will always struggle. Peyton Manning is tremendously successful because of the ability of his offensive line to protect him. When he has not had that protection, he, and the team, struggle.

While the Colts may have a fairly sophisticated offense, that doesn’t mean the offense must have a large number of plays in the playbook to win. In fact, the great Vince Lombardi only had seventeen offensive plays for his offense. However, the key for the Packers was their ability to hone the execution of those plays. Lombardi emphasized blocking and tackling. The Packers might have only had a few plays, but could they ever run those plays well!

Like football, business activities are complex and require numerous players to meet their various individual responsibilities for the company to achieve. In business, however, too many owners and managers believe that because they have the tools necessary, like great software, they have everything they need to be successful. Unfortunately, that generally isn’t the case. The ability to use that software well, just like in sports, requires constant repetition and improvement. Software is like any tool, if you don’t use it well, it isn’t worth much and, in some cases, it might make matters worse. You have to be skilled at the basics before you can really implement large scale visionary growth strategies. Otherwise, in my experience, you will find yourself facing some difficulty that becomes a major roadblock.

I was CFO for a company that had been recently purchased. At a meeting of our senior executives I asked each of them what they thought were our biggest challenges. They each responded with process problems that we faced like stock outs, poor bill of material data, bad inventory control or our inability to forecast sales demand. I forwarded these meeting minutes to the company that now owned us.

Within a few hours, I received a call from the individual who was my primary contact from the “parent” company. He was not happy. The Meeting Minutes indicated a lack of basic “blocking and tackling” and the overarching strategy of the buying corporation called for us to focus on growth, not process. The subsidiary company was directed to press forward and work on growing the business. If we had these basic problems, we would have to work on correcting the problems concurrently as we grew. Unfortunately, we didn’t have the personnel or resources that allowed us to do both. As a small organization, we had talented people but they were already working hard. We really needed about 90 days to focus on our immediate process problems so that we could be in a position to execute the larger plan. Like good sports organizations, we needed time to correct our weaknesses and improve our internal execution and technique. Just as Game Day is not a good time to learn to run a new play, it is tough in business to both correct fundamental execution flaws and grow.
However, we had our marching orders and we plowed ahead. The results were predictable; sales suffered when the organization wasn’t able to properly execute the strategic plan. Sales forecasts were missed and revised and then the sales staff became hesitant to make commitments, because now, the company was not meeting delivery dates or worse yet some members of the sales team decided the best way to get things done was to make promises on delivery dates and hope the company could meet these promise dates. While we were able to meet most of these dates; that wasn’t good enough to keep all of the customers happy.

Ultimately, too many dates were missed because the company had poor processes in place. Not surprisingly our growth was eventually hampered because we failed to master the business basics of good bill of materials, good inventory control and on-time delivery. Without these foundational processes, the growth of any company is limited.

The alternative is to allocate the time necessary for the organization to improve sufficiently so that it begins to master these areas. Recognition of the problem and development of a plan to generate the necessary improvement allows the whole organization to visually see commitment from management along with follow through and success. This success helps foster confidence throughout the company and the culture begins to change. In the end, mastering the basics also helps reinforce the need to do individual jobs well throughout the entire organization. The ability to master these basics will help the company achieve the larger goals.

B2B CFO®

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