Who Is Running Your Business?

In every business there are activities and tasks that the owner, manager, founder, or key executives don’t like to do, don’t know how to do, or just don’t want to do.  When those tasks are key elements or effect the key elements of how your business does business, the people handling those tasks essentially begin “running” the business.

At first it may not seem to be important that you allow someone within your organization to make the decision as to how customer, vendor, or product information is gathered, maintained, and reported.  It is somewhat of a technical and administrative task – not at all strategic right?  In the overall operations of your business, it may very well be a strategic decision that proves costly.

Whenever one person or several people throughout the organization are able to control information or direct activities through withholding information, gate-keeping, or establishing their own “turf”, the organization begins to be less than it can be.  Employees who aren’t privy to information, able to use systems or tools, or are reluctant to “engage” the gatekeepers are unable to contribute fully to the organization.  The return on employee activities decreases as the organization is less able fully to deploy its resources into key activities.

Another area in which companies are vulnerable  is when employees make the decision as to whom the business is willing to do business.  This is a two-fold problem in that the business loses revenues AND it can expose the business to lawsuits for discrimination.  Say you have a sales person who doesn’t want to handle accounts for certain ethnic, religious, or other demographic characteristic.  The business is on the hook for his or her behavior toward that protected class of individuals if someone chooses to make an issue of it.

Another area for potential loss of revenue is when members of the organization make the decision that “small deals” aren’t worth the company’s time or are too “costly”.  Often these strategic decisions are made by levels of the organization which don’t have information on the businesses cost structure, capacity, or other key criteria.  Businesses make strategic decisions on who they want as customers.  The strategic leaders of an organization may decide to utilize a “loss leader” – a product or service that doesn’t make money – to get a customer,  then up-sell that customer more profitable and highly profitable products or services.  If that strategy isn’t conveyed or understood by the sales force, then sales opportunities may be missed or turned away.

The leaders, manager, executives, owners, and decision-makers in the organization who set the strategic direction of the company cannot, and probably should not be involved in every transaction and business conversation.  They can establish strategic objectives and targets, communicate the strategy and expected results, and through monitoring of the organization’s and individual performance keep the business on track.

It may be easier in the short run to let tyrants, dictators, and gatekeepers rule your organization.  It is never pleasant to deal with performance or personality issues.  It is even more difficult to remove from your organization people who have established “control” of information, systems, and activities in your organization to such an extent that your organization will be “walking wounded” when they are let go.

Here are some suggestions for preparing your organization to make some painful personnel and process adjustments:

•    Identify who has sole control of key systems or information.
•    Review all potential avenues for first customer contact and determine if business you want or want the opportunity to consider is getting turned away .
•    Examine the information on types of customers, size of deals, pricing, and other strategic sales information and determine what the members of the organization understand about your strategic sales objectives.
•    Review individual performance, job descriptions, and results to determine if things are on track individually.
•    Identify opportunities for cross-training, rotational assignments, and other mechanisms for getting everyone out of the “comfort zone” and “control zone” of their individual roles.
•    Consider outside support, temporaries, and other “flex” staffing options for adjusting the balance of skills, expertise, and experience the organization has on systems, tools, and processes.  For example,

    If only one person always does the accounting transactions, consider having an expert on the accounting software come in to review your processes; doing all of your own tax filings, etc, have a CPA come in to review your filings, or do a year end audit.
    If you do your own payroll, have several payroll services come in to quote outsourcing the activity.
    If you are using an Access Database for customer or vendor information and only one person in your organization knows how to use it, consider customer relationship management and supply chain management software for your business.

Businesses cannot afford to be held hostage by their own systems or people.  Step back from your day-to-day perspective on your business and ask yourself:

•    If X quit tomorrow, who would do the job?
•    If Y had to go on extended medical leave (or worse, died), how would I get the information I need?

The bottom-line is impacted by who makes the decisions on the strategic direction of your company.  Are you making all of those critical decisions?  Is the organization taking its direction from you?  Who is running your business?

Copyright © 2004 F.O.C.U.S. Resource, Inc.