Are you taking into account predictable changes in your forecast?

expect predictable changesI was getting ready to head north to Seattle. The drive time according to GPS was 2.5 hours. That might have been the case at the moment, but many times the traffic clogs up around mid day. By the time I was nearing Seattle, surely I would hit traffic that GPS wasn’t forecasting. And I did. It added about an extra hour to the drive. Good thing I planned for it, as I would have missed my first appointment had I not.

In business, there are many situations that are known, but don’t always show up in the tools you are using to plan for the future. It could be seasonality or cyclicality in your business. If you take your current month or annual sales and project them forward, you are likely to miss your projections all together. This happens more than you would expect. How are you taking predictable changes into how you run your business?

 

Is it time to step on the gas?

know when it is time to push on the gasHave you ever noticed cars slow down going up hills or to the top of a bridge? Once the peak has been reached, traffic speeds up and gets back to speed limit drives. This happens because the gas is not applied a bit more to maintain speed going uphill.

Headwinds can be experienced in business in the form of choppy market conditions, new competitors, supply chain disruptions, etc. Businesses that excel step on the gas. They figure out how to move faster. By doing so, they are way out ahead of the competition when the market conditions ease. How are you making sure you step on the gas at the right time?

History repeats itself

history repeats itselfHave you ever heard this situation? A company makes changes to its strategy and people development plans to grow, only to find it is stumbling significantly after the changes are made. This exact situation came to light in a conversation recently. A few decades ago, the company underwent an initiative to address cyclicality in its business, leading it to change its strategy and expand its offerings to minimize the impact of the cyclicality. It also undertook a deliberate effort to match the right people to the right position to minimize risk in the business and grow skillsets.

Years later, the company backed out of the newly expanded offerings. The cyclical part of the business was doing extremely well at the time and the newly expanded offerings were not quite as profitable, so resources were reallocated. And to meet the needs of the business, people were promoted more quickly and did not have the full skillsets. As a result, the company found itself in the same spot it was a few decades before. The history lessons had not transferred between generations of leadership. How are you making sure history does not repeat itself in your business?

Are your actions creating a hazard?

are your actions creating a hazardIt is summer in the Portland area. The views are stunning—snow capped volcanoes that sit atop mountain ranges, green rolling hills and winding rivers that surround the city. The many bridges provide for a brief, but spectacular view that is unmatched. And that can be distracting for some drivers new to the area, or just visiting for the summer. Yesterday was a prime example. A driver proceeding well below the speed limit suddenly pulled over to the shoulder and stopped to observe the view. His actions created a hazard, unbeknownst to him, as he was distracted from accomplishing his task of driving safely.

Distractions in the workplace have a variety of impacts on the business. It could be as simple as lower productivity. But it could be a serious as someone getting hurt or killed. Many times, the distracted person is not the one who gets hurt. It is someone else that is nearby. How are you creating a distraction free culture?

Are You Good or Lucky?

Are you good or lucky?Do you ever drive down the freeway and see people driving at 60 miles per hour or more with less than three car lengths ahead of them? Not a day goes by that I don’t see this many times over. And, there are typically a number of people driving in blind spots. It is surprising that there aren’t more accidents. The reality is, there is not enough room to stop at that speed and that distance should the need arise. The drivers are lucky, not good. But, they think they are good drivers due to the absence of accidents.

Do you have this situation in your business? Is the measure of success the lack of something bad happening? If so, it is time to take a step back and look at the risk factors in your business. High performing companies know their risk factors and they know the levers in the business to pull at the appropriate times. Their measures of success are positive measures of their performance. How are you making sure you are good, not lucky.

What are your red flags?

what are your red flags?It has been raining pretty significantly for days. I didn’t notice it at first because it was dark and due to the amount of runoff in the hilly areas heading to the storm drains. After days of walking by, something didn’t seem right, so I took a closer look. And there it was – probably a broken pipe at the sprinkler irrigation box with significant quantities of water literally heading down the drain. The house was on the corner – it’s front door and driveway on one street and the leak on the other. It’s a house I walk past daily and is a few miles from home, so I don’t know the people. After knocking on their door and three others, I finally found someone home to alert. It’s likely the people are out of town. A few more days passed and a few calls to the water department, the issue was addressed. But the water keeps flowing. They will be facing a massive water bill and huge amounts of wasted water. Clearly there was no mechanism to alert the city or the people to the problem.

Many businesses face similar issues around leakage. They may arise in areas with low visibility. Without a mechanism to alert you to the issue, it can go unchecked for quite some time, resulting in a big surprise. Other times, it may be noticed, but unresolved because the people don’t have an avenue to resolve it. The challenge is to keep ahead of it and address the root cause before it becomes significant. Do you have warning systems in place that alert you to issues in your business? And if you do, do the people have a mechanism to resolve the issue before it becomes significant?

How do you find your blind spots?

blind spotRecently, an out of town acquaintance was in Portland for the summer. Being from a major city, she never learned to drive. Not a big deal as she was staying close to downtown and could bike to work and around the area for fun. We were talking about how to get around and I suggested she be careful how she navigates the bike lanes. They are on the right hand side of the road and if a car needs to turn right, they would cross through the bike lane to turn, making it incredibly important to always watch for vehicle blind spots. Having never driven a car, she did not understand the concept of a blind spot, so I explained it to her.

Blind spots exist in business too. They are danger lurking in the wings that can’t be seen. And the only way to find those blind spots is through experience or, if it does not exist, help from someone who has the experience. Even if you think you have the experience, you may be too close to the situation to see the blind spots. How are you watching out for blind spots?

Have you really thought about all of the options?

Have you considered all the optionsPigs and goats. It was the solution to a problem that many face, the need to clear brush. I have to admit that it is not a solution that would have ever crossed my mind. For the manager of a farm program at a local winery, it was the solution that made the most sense. The goats were quickly and effectively able to clear the brush. The pigs were unleashed next to address the roots. They quickly and effectively cleared the root structure and completed the removal of the blackberries, leaving land that was cleared and ready to utilize.

There are always many options to resolve problems or grasp opportunities. To some the options may be obvious, to others they may not be known. Getting the right people around the table that have the skills and background, that are aligned with the organizations values can help get you there. In the case above, there was no time pressure and the values include sustainability and organic farming. By including the right people, they were able to utilize an option that fit with their purpose and values. How are you making sure you include the right people and get all of the options on the table?

Momentum vs. Technique

momentum vs techniqueSaturday morning starts with a tough workout with Babs, my personal trainer. Over the years, she has taught me a lot about the proper technique. When we first started, she would almost always tell me to stop and start over. After a reprimand for using momentum, she would instruct on the proper technique.

This week, she was reflecting that her regular group of people know the connection between mind and body, enabling utilization of the proper technique. Momentum is easier as the motion propels the weights or the body in a direction. With momentum, and not having proper technique, it is possible to get hurt or create an out of balance in the body.

Business is the same way. Getting momentum can be a little tough at first. But once things start moving, the momentum can propel the business forward. And while having momentum is critically important, it should never be at the sacrifice of technique. Without proper technique (skills, capabilities and focus), the business may veer off course, having a negative impact that may be detrimental long-term. How are you differentiating between momentum and technique in your business? What can you do to refocus on technique?

The market always turns

the market turnsThere aren’t too many industries that have no market cycles. Some are more significant than others. Over time, as business grows and changes, some companies lose sight of the market, how they are positioned and their cost structure. As a result, erosion starts to occur in the profitability of the business.

This is the point when many companies are bought. But even if a sales transaction doesn’t take place, it’s time to put some tension back into the business. Why? Because the market always turns at some point and if not addressed, the business may go out of business due to high fixed costs and lack of market insight.

What does this mean? With lack of market insight, the company will miss the market signals that indicate it is time to adjust the business as the market demand starts to drop. With a high cost structure, the company may not have enough time to adjust before it runs out of cash. Thus becoming another company that doesn’t make it through a market cycle.

This is where it is critical to have a focused management team that has a strong sense of urgency. You never know when the market is going to turn, so acting with a sense of urgency as if the market turn is today or tomorrow, will position the company well for when it actually does turn. How are you positioning your company for market turns?