Fifth of 5 of the Most Common Mistakes to Avoid When Growing Your Business
Heart and core of opportunity and risk are your people, how they perform and how easily miscommunication occurs. Add to that the fact that addressing people problems is so distasteful that resolution always goes long past when everyone knows there is an issue.
Survey results about the percentage of people or companies painting an overly optimistic picture to a customer, vendor, or financing source are depressing. The latest version of the surveys talks about the lack of faith people have in various basic institutions or even pillars of society, much less corporations. Now add in your exposure when some of your people push to the edge of grey or even into the black side of an issue, particularly as evaluated by someone using hindsight.
Once you open your planning to the fact that recognizing the extent to which puffery in your organization is leading to suboptimal decisions, you can identify and then resolve some 800-pound gorilla issues or sacred cows which have been left to graze far too long.
Start with asking yourself to answer true or false on this statement. Where does your Business Paint an Overly Optimistic Picture to a Customer, Vendor or Financing Source? Once you expand this thought process to consider the impact of that puffery, it is almost impossible not to see this issue as a point to regularly revisit. Make sure you consider the extent to which you and your people are kidding yourself on crucial underlying facts as part of your cost of puffery analysis.
Almost regardless of size, leaders confidentially admit to me that their business have at least one glaring exposure area. Where might someone in your business have crossed the line with puffery gone astray? An individual hired with a dramatically over-embellished resume; financial projections requiring almost flawless execution to achieve; or vaporware sales discussions exist for a reason.
As part of this open kimono process, leaders like to practice on me for a story or out of the box example I have helped someone address. You may like me to go first also.
Let’s think inside a different box I have seen helping clients with their capital expenditures program (CAPEX) justification process. For those who may need a better CAPEX process, what happens more often than it should is that people game the system as follows. These processes include the requirement that investment proposals meet threshold rates, with a follow-up to ensure that those rates are met, exceeded or an explanation is provided. This sounds reasonable, appropriate and hard to game. That is, until people see that (1) there is no follow-up on results, (2) the follow-up is so halfhearted and non-confrontational that really glib answers skate by, or (3) worst of all, the entire CAPEX process is short-circuited with a flashy PowerPoint presentation to the board of directors. In a case like this, puffery and kidding yourself just cost your organization a lot of money, people or critical time.
As more people become increasingly disillusioned about corporations, the government, our education system and even social institutions, where might some of your high flying salespeople cut it even closer to the edge on a sale, presentation or representation. After all, the best performers are normally cut a lot of slack as long as they produce big results.
Instead of accepting smiling nonspecific answers, statements that everything is great with a rosy blind-eye approach, or a culture where going along is strongly encouraged, get an outsider like myself to periodically uncover financial and subjective blind spots within your company. Regardless of corporate culture, it is much safer this way. Understanding the truth about your businesses real risk and equity can open doors to a whole new world of possibilities. This will allow you to fix areas you didn’t know were in trouble and point things in a different direction that will work.
You may be very surprised at what your intuition will lead you to consider, if you truthfully answer this related people question. If you knew now what you did not know then, which employee(s) would you not hire? If you answered “yes’ to the question about your organization painting overly optimistic pictures, an inanimate object which is what an organization is, did not commit puffery or skate too close to — or across reasonable guidelines. One or more people are doing this. Some CEOs I have helped have reluctantly faced up to major risk when they walked through this basic exercise with me.
How long will it take for one of these actions to help your business make more bottom line profits by better managing limited resources available to create sustainable growth and profitability with more accurate financial information?
Known as the Fiscal Doctor, Gary W. Patterson has helped 2 INC 500 companies and over 200 companies in manufacturing, technology, service, construction and distribution in companies from start-ups to Inc. 500 to Fortune 500. Gary Patterson helps you grow top line revenues, keep more of the bottom line and make life more fun. Author of Find Your Blind Spot – Before It Finds You, and Million Dollar Blind Spots. Contact Gary when you need a speaker or consultant on strategic profitable growth while removing risk at www.FiscalDoctor.com or 678-319-4739.
© Gary Patterson, the FiscalDoctor® www.FiscalDoctor.com
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