Best of ColoradoBiz: Obstacles? They're doable
Internal vs. external
(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.)
Obstacles come in two forms: internal and external.
The single most important factor in dealing with obstacles is to identify them accurately, neither understating nor overstating their importance or the degree of difficulty in solving them.
It is worth noting that every time I have worked with a client able to correctly and realistically identify their obstacles, overcoming those obstacles becomes much more realistic. This is equally true for both external obstacles and internal obstacles.
External obstacles, the economy, the marketplace, your competition, these are clearly outside your control. Nevertheless, correct recognition and assessment makes it possible to create sound approaches to dealing with them. Taking action will mitigate their negative impact. The alternative is wringing your hands.
Internal obstacles are of course quite different for they are under your control. Although some will say, "I can't do anything about that because …", virtually all internal obstacles are actionable if you are willing. Because internal obstacles are frequently people and organization issues, the actions required are often not taken.
Reality 78 – Insurmountable challenges? They are obstacles, period.
Once goals are established, it is essential to identify the obstacles that stand in the way of achieving them. Many companies err by not directly addressing their obstacles or by pretending obstacles don't exist. Only by honestly recognizing the obstacles is it possible to develop the strategies to overcome them.
When identifying the obstacles, it is important to include any factor that stands in the way of achieving the goals, however insignificant or seemingly insurmountable the obstacle may seem. Once identified, obstacles can be broken down to their doable parts and become assignable.
True, because of limited resources, technical ability, capital or some other issue, not all obstacles can be overcome in the near term. However, the mere process of identifying the obstacles and the requirements to overcome them allows a reevaluation and modification of the objectives where necessary to ensure goals can be achieved on time and on budget. Identifying the obstacles and developing plans and strategies to overcome them gives the organization a level of confidence that the objectives can indeed be achieved.
Thus, once recognized and specified, obstacles become far less daunting.
Businesses need cash flow analysis and plans to meet cash requirements.
A critical requirement for all businesses is the estimation of cash flow and cash requirements. By developing the routine and discipline of performing cash flow analysis on a weekly basis and projecting cash requirements in detail on a week-by-week basis, a company can identify potential cash crunches before they occur.
This weekly reporting approach forces the company to look at their receivables, payables, payroll and capital expenditures on such a regular basis that spikes that previously would have been unanticipated are not only recognized in ample time but can be provided for in most cases because of the long lead time management has to react to cash needs.
While I like to see cash projections in detail on a week by week basis, certainly for 13 weeks (one quarter), it is essential to also project cash requirements for the remaining three quarters of the year and to roll this estimate every week so management is always looking out at least a year.
While it is a bit of a bother to establish this discipline and set the reporting procedures, within just one month of time, it will be easy to see that the pay off is enormous.