Well here we are right in the middle of Fall. Leaves are changing colors, we get beautiful clear and crisp weather days, and we turn our thoughts to the holidays and time with our families.
Unfortunately, this fantastic time of year is often in contrast with the year-end hustle and bustle inside your organization. Year end targets need to be hit, reducing inventory to improve cash flow during the quieter months, and of course planning for the next year. Grow Margins, Grow Volume, and Reduce Cost are the most typical challenges laid down to the management team. All of this is commonly compressed down to the last few weeks of the year causing long hours and endless review meetings.
So, this gives you choices to make now that will impact your full year 2018 and potentially your bonus and set the tone and expectations for 2019. I have seen companies and individuals, approach this in very different ways in the past, the most common example is to be thorough and play it safe.
Playing it Safe
Hours of analytics reviewing every product and every customer, complex plans to extract more margin and volume from existing customers, vendor reviews to fight off price increases (forgetting that vendors have the same type of goals that you do). In these types of organizations, common phrases that bounce around the office include, “Grind it out”, “Get your head down”, “Push for more” “Don’t take no for an answer”. Unfortunately, this type of approach and resulting vocabulary is a symptom of a company with an inward-looking culture. The late nights and herculean efforts seldom deliver transformational results as the organization has limited itself to what it knows instead of learning what possibilities exist out in the world.
Mature companies often believe this is something beyond their capabilities and look on enviously at start ups and agile organizations that deliver real change in their business. So, what is it that they do differently that allows the change? For me, a key difference is that these companies are looking outside to discover the problems and solutions needed to make the changes you are looking for.
- Volume growth: new markets, segments, products, geography, and services.
- Margin growth: value engineering, challenging new suppliers to reduce costs, giving customers the value-added services they want, and eliminating waste in their business
- Improved cash flow: introducing new suppliers, new financial solutions, and finding new ways to plan inventory
Now these transformational companies must also complete a review of their business and have the proper planning tools in place, but what they do not do is make an industry out of review and budgeting instead they make an industry out of finding new and creative solutions to old problems.
Fall is not the time to stay indoors, stare at spreadsheets for hours, and survive budget meetings. Fall is the time to start change, challenge the status quo, seek out new opportunities for your products, engage with new suppliers, embrace new technology, and find hungry partners who will help you grow. Embrace this new season to start the change in your organization, because you must remember winter is coming!