Best of CoBiz: Clean up after yourself!

(Editor’s Note: This is an excerpt from business performance improvement expert Larry Valant’s book, Stop Breaking These Rules! 100 Hard-Hitting Truths for Business Integrity and Performance.)

Be aware of the cyclical nature of your business and be ready to do something about it before you must.

All business is subject to cycles. The evidence is all around us and the detailed nature of the impact of those cycles on our business is usually easily obtained and analyzed. The first important step in dealing with business cycles is to collect information about your industry, your market place, and your company’s history. Critical to the early recognition of reality (the ERR Principle) is being aware of what is going on within your industry and market that is cyclical in nature, and therefore predictable as to magnitude and duration.

Once you understand your business cycles, you can predict their timing and their potential impact, prepare contingency plans before they are needed and implement them on very short notice. Success in using this approach does require leadership that is absolutely proactive and completely non-reactive, essential elements if companies are to perform successfully over the long haul to the benefit of all stakeholders.

Companies often miss-spend huge amounts on advertising and promotion because they lack a clear vision and return analysis.

A clear vision will define specific direction, actions and expected and quantified outcomes. A clear vision will not allow action to be taken without a clear end in mind in terms of dollar results, which are projected based on expected expenditures.

All too often, when a company gets in trouble through shortfalls in sales, more money is dumped into advertising and promotion to boost sales without adequately projecting the impact on gross profit and the bottom line. Well-managed companies on the other hand take the time to understand the origins of their shortfalls, the steps required to overcome the shortfalls and the returns expected on any expenditures that will be undertaken.

By constantly measuring actual results against expectations and by performing the analysis necessary to understand where shortfalls originate, it is possible to devise specific actions that will put you back on track.

Throwing money at a problem rarely solves it.

High quality work is impossible in a sloppy environment.

Somehow a myth was created that highly creative people should be permitted to exist in messy environments because their thought processes are such that they can’t be bothered with mundane tasks such as cleaning up after themselves. I call this a myth because, while there are clearly exceptions, they are few and far between.

I know of a mathematics and economics genius who looks like and lives in constant disarray. Yet when he speaks, executives in mahogany lined penthouse offices listen intently because of the value of what he has to offer. My college roommate, who in four years of college never made his bed and never cracked a book, graduated with a 4.0 GPA and was worth $10 million before he was 30. These are the exceptions to the above rule. You probably know some yourself.

Then there are the rest of us.

Once upon a time I managed a million-square-foot manufacturing facility with 1,500 employees. The previous plant manager had been removed because of significant cost overruns and substantial shortfalls from scheduled production. His performance failures were underscored by a cluttered, dirty facility.

I began my management tenure by insisting the plant be clean and orderly. It took one devoted week. At the end of that first week, the plant management staff recognized that lack of performance would not be tolerated on any front. Within one month, inventory was under control; within three months, we were achieving production schedules. And the appearance of the facility reflected our successes.

What’s the difference? When working with a group of people, the environment must be conducive to effective teamwork and clear thinking. A leader must create and maintain an environment in which success can happen. Individual brilliance may succeed in a messy environment, but effective teamwork requires organized surroundings. Therefore, unless you are a genius who commands hushed audiences, clean up after yourself!