A couple of weeks ago, I was asked to offer advice to a company that was doing poorly in its revenues and profits.
We sat with the owner CEO to discuss the company’s state of affairs with me asking and him giving answers.
Q: What about the processes in the company, how satisfying are they? A: They are OK I think.
Do you have some evidence for that, do you have some data to prove your assessment? No, we don’t do any measurements, they will add to our costs.
How about your product line; are there any new products or product improvements that you delivered to your customers say over the last three years? No, our product line is unchanged, we know how to do it well and we stick to it or as you management people say “we stick to the knitting”.
And your staff, your people, how do you look after them? They are all grown-ups, they look after themselves and don’t need anything from me or from anybody else.
When was the last time they were in some training? I don’t have the luxury to take them out of their jobs for them to hear some fancy new ideas that don’t have any meaning for our works here.
I suppose you have some kind of a strategy to aim at something better for your company, don’ t you? Our strategy is simple “work hard every day” something I have taken from my father who established and first run this factory.
Do you have partners with whom you work with like suppliers or your bigger customers? No, these people always want to get the maximum out of you without any regard for you or your business; I never trust them and always keep them at a distance.
You know that as the owner, the general manager and the leader if the company doesn’t do well, it reflects on you and raises some questions as to the effectiveness of your actions to reverse its worsening; Don’t you agree? But I come to work first and leave last, I press my staff to work harder and try hard to get the best deals for us from suppliers and customers alike.
I think at this point we may conclude our short discussion and I will if you would allow me, put forward some thoughts. Before profits, you know, there are other things you must do right. Oftentimes, hard work alone from the leader is not enough. Please consider seriously things like:
- Listen to the changing needs of the customer and go for a market-oriented strategy, and in parallel do the training and developing of your people to acquire the necessary capabilities. It will make it possible for you to think and renew the products and services you offer in the market
- Communicate with your people and come close to them, caring for their needs and aligning their personal growth with that of the company’s, creating a culture of trust and confidence
- New technology nowadays is everywhere. Bring it to your company to help your people do things better, more efficiently and give them new perspectives.
- Things will improve and you must be ready. Plan in time your expansion strategy to enable you to produce increased sales and know your cost structure for increasing your capacity
- Build trust with your partners and establish mutually beneficial relationships with your suppliers and customers; it will allow you to see things in a wider and more strategic perspective.
- You know as well as I do that processes are never set in stone. Make them data-driven, review them, learn and improve.
- Leadership, of course, drives them all! The genuine and persistent interest you are showing is an important prerequisite. But make it become more by communicating your purpose and ideas, coaching and inspiring your people and creating a culture of trust both inside the company as well as with your external partners.
What you say, replied the CEO thoughtfully, sounds promising to take the company out of its troubles, and sets for us a new direction that makes me keen to start working on the issues immediately.