- Written by Rick Riebesell
Orienteering for the Business Owner
If you are lost in the woods without a map, you might wander aimlessly hoping to find your way. If you have a map, the first thing to do is to try and orient your map. The fact that the upper part of the map is north means nothing if you do not know which direction is north. So you look on the map for certain characteristics that can help you face the map in the direction you are looking. Those characteristics might be changes in elevation, a river, a lake, or some other unique area. You may have to walk around to get oriented, but once the map seems to be oriented, you follow it to verify that you are following the map as it relates to what you are seeing. Doing this helps you find your way.
A business owner in a period of economic turmoil easily can feel lost. The process to lose that lost feeling is to orient the existing business plan. The processes that worked before will work again, but the perceptions now are different. The map is the process that was working before. The solution to the problem is not to react to sudden changes and abandon planning, but to orient the proven planning process to the new perceptions and conditions to get the business on course.
For the private business with an implemented planning process, the map is in good shape – it just needs to be oriented to new situations. Without a planning process in place, the business has a more difficult task. It is lost without a map. With no documented business goals, it is more difficult to understand what the course was to be before things changed. What needs to be done is to create a map - set a new course. The worst thing to do is wander around without a map by simply reacting to changing conditions.
Even if changes bring a sense of urgency, business owners should do the most important thing - communicate their values to one another. In three to five years, what does each owner want? Owners will not always want the same thing but it is important that all know what the others value. Aligning these values sets the course for planning. Next, as the policy-making group of the business, the owners need to make good decisions and set reasonable goals.
To produce consistently good decisions, a quality decision-making process must be used by all elements of the business as standard practice. It is not enough that one or a few people with authority make a decision. The elements for making a good decision are: obtaining the requisite information to make the decision, understanding the time elements involved in making the decision, consulting others who have made similar decisions, and understanding from those directly affected by the decision what the consequences of the decision will be. In other words, a good decision requires the involvement of a group of people. Those in authority will make (document) the decision, but with the involvement of the right people – those having knowledge, capable of expressing independent opinions, and having experience. No one person or one small group of people will possess all of these characteristics at any given time. Therefore a quality decision-making process must be a group decision-making process.
When goals are determined, the business must act to realize the goals. The decision-making process is used by the executives of the business to determine the actions to be taken and the methods to be used to monitor the success of these actions. As the productive elements of the business take action, the information of the monitoring of the progress of these actions is documented as it is received. From the productive elements of the business to the executives to the policy-making group, the documentation of this progress is available and reviewed.
When the policy-making group determines that a goal has become unreasonable, the goal is immediately revised and the revision is documented and make known to the productive and executive elements of the business. There is nothing more corrosive to business morale than an unreasonable and unattainable goal. Once a goal is revised, actions in place must be revised to meet the changed goal. The progress of these altered actions will be monitored.
The documentation of this planning process must be dynamic so that all elements of the business (policy-making group, executives, and production employees) are aware of all monitoring and revisions as they occur. This dynamic format is the map.
You may think you do not have time to create this map. Business conditions are variable. The very existence of the business may be threatened. But is it a good use of time to wander around lost without a map. It is possible you might get lucky and be found, but it is better to depend on good decision-making rather than luck. Create the map and navigate the economic chaos. With the map oriented, set the course, revise the course as necessary, survive, and succeed.
- Written by Rick Riebesell
We Did It Before – Can We Do It Again?
To survive this crisis, your focus should be on surviving the next crisis.
When you look back on changes in a business, you see the point where one effort stopped and another effort began. Often the stopping point of one effort and the starting point of a different effort is not recognized. In most businesses changes develop re-actively and without notice, much less documentation. Most businesses cannot identify the decisions that made them have success. However, in a business with implemented planning procedures, the decision and, more importantly, the method will be recognized and documented.
In the typical private business without planning implemented, the business reacts to outside forces – economic or otherwise. Especially in a crisis, actions will be taken in response to factors outside the business after the business has been affected by those factors. Those in the “rather be lucky than good” category survive, and most others do not. The lucky ones may understand after the fact why they made it, but they probably cannot replicate the success.
- Written by Rick Riebesell
Pivot During the Whack-A-Mole Response
The probable measured response to the COVID-19 pandemic has been called a whack-a-mole response: relax lock down restrictions, monitor outbreaks, and react to outbreaks with testing and control measures (where they exist). A whack-a-mole game is an arcade game that involves hitting mechanical moles with a mallet as they pop up from various holes. Colloquially, the term refers to a repetitive task of some degree of futility. Because of the whack-a-mole response to the pandemic, businesses face a rapidly variable economic environment for the foreseeable future.
This whack-a-mole response is reactive and is necessary because of the failure of public health agencies and the governments controlling them to properly plan for a foreseeable contingent event – the COVID-19 pandemic. When proper planning is not implemented (action taken on the planning) and the contingent event occurs, all that is left is to react to the circumstance. There is a direct analogy from this public governance failure to the private business that does not do the planning to implement an owner agreement with succession and buy-sell provisions to be prepared for the foreseeable contingent events of owner death, disability, or withdrawal from the business.