Two years of unexpected financial setbacks. And I don’t feel good about this year’s results. As a managing director, you’ve tried everything, but now it’s starting to feel a bit tense. Come talk to me…
That’s often how it starts. And then reading, asking questions, and above all, listening to what’s going on. After all, financial setbacks are a consequence, not a cause. But what is the cause?
We live in a dynamic world, with rapid and drastic changes. As an organization, you must be open to these changes and act accordingly. Do so as quickly as possible, before it becomes a true crisis and a major reorganization is necessary.
Asking a few simple questions helps enormously:
- Does my service/product still meet customer needs?
- Are my employees able to adapt themselves and the organization?
- Do I have sufficient control over my organization and do I receive signals when things threaten to go wrong?
- What are the Critical Success Factors in my organization, and do I have insight into them? In short: am I in control?
The accounting reports fall short in this regard. They’re too late and focused on accountability, not on management. The popular saying here is “where accounting rules, vision is lacking.” So, don’t spend too much time on it.
So, we’re looking for the
organization’s (new!) Critical Success Factors.
Has that suddenly become staffing? Because revenues can fluctuate significantly?
Is it perhaps the costs? Too high because new entrants have arrived and some “fat” has been added during the good years?
To be clear: this doesn’t necessarily lead to new, extensive reports! With careful listening, you’ll quickly understand what’s going on. And yes, your employees know it too! Corporate blindness and loyalty can cause problems here, but asking “stupid questions” often yields surprising results and quick insights.
The order of approach is usually:
- Inventory (reading, listening and asking questions)
- Cost control (if it really is necessary, also send a signal)
- Sharpening strategy (must be continuous)
- Align organizational structure, staffing and culture with new strategy
- Adjust Planning & Control.
