All the world is abuzz with questions about the economy, and for anyone in business, this in turn begs the question, "How will the current economic situation affect me and my business?" Interesting comment from Richard Branson on his blog about Innovation - A Driver For Business
that touches on this subject.
There is a thought that the current economic situation means that there is a different approach needed for the small business owner to keep afloat. In reality, while there is even more need to be clear on managing all the parts of the business effectively, spending well and eliminating waste, these are practical approaches that should be followed even in good times.
Spending money wisely in business, and ensuring that there is good measurement of the metrics that apply to the different sections of the business, are important keys that let us know that we are on track to achieving great results. But we need to do more than measure – we need good systems in place to ensure quality standards, consistency in delivery, and a degree of predictability. There is never a time that this is not important in business... though sadly, it is most frequently not practiced. Indeed it is very usual for the small business owner to neglect some areas that are quite critical to the well-being of the business, and all who work there, and of course, this is reflected in the profitability, and even the value of the business as a saleable asset.
In his article, Richard Branson suggests businesses should experiment and use adaptation to navigate the waters of this changing economic environment. I would agree.
In order to adapt it is helpful to have good knowledge of what it is that you do now. Knowledge of how you do what you do in your business - that everyone knows, and not just you the owner, hopes is how it is done! So how many businesses have good documentation for the procedures, and marketing and operations planned and scheduled in advance? How many have a systematic approach to hiring and managing their staff and the performance employees (and Management!)? Very few. Experimenting by any other name is testing, and good testing requires analysis of the results.
Innovating and experimenting are most important in order to keep relevant in a changing world. If you want to innovate, then begin by understanding and having a clear written process for everything that happens in the business, and ensure that the vital information that you need to run your business doesn't fly out the door with your next employee who leaves.
Tough times call for good management. Not 'crossing my fingers' management, which may have been enough to sail through the good times.
And of course, even good times, are better with good management.
Good management doesn't just happen without thought.
Neither do good profits.
Labels: business coaching, small business management innovation experiment