Tuesday, 7 July 2009

Business Basics 1. More businesses go wrong by not doing the basics than not being sufficiently advanced

This may sound like a consultant talking himself out of business – where would we be if there were no fancy new business model every few years? Some ground breaking new innovation that will change everything about business beyond recognition. Be it the internet, or supply chain integration, or “organic” produce.

Well, I am not saying that these things are not vitally important, and that for some businesses failing to embrace them will mean the end of their business. After all the number of Fletchers decreased after the invention of the gun. But not immediately. Arrows and guns co-existed for a while (at least according to the Western movies of my youth), even if in the end there was only going to be one winner in that technology shift. There are even a few niche fletchers around now.

A fletcher who, unable to transfer his skills to metalworking, ignored the coming of guns surely found that the number of his customers declined over time (presumably after every battle) – but it would have tailed off rather than stopped instantly. However a fletcher who did not pay his bills, made wonky arrows and worked in a shed no one could find would go about of business even quicker.

So, getting the basics of business right is essential in order that you are around in business long enough to worry about the new, new thing. So, what are the basics of business – in a nutshell (or sheaf) they are cashflow, customer satisfaction, profitability, quality of production, security of supply, and promotion. And that has not changed in centuries – internet or not.

Feel free to disagree or tell me something essential I have missed out.

1 comment:

Andy Gibbins said...

Fully agree

I've worked with many organisation who have wanted to implement advanced improvement techniques. This is good and shows a willingness to change and improve.

However, I would alway recommend that they ensure that they have the basics right and fully nailed down first.

The only point I'd add to your list is HSE. Good HSE is an output from a positive organisational culture and goes hand-in-hand with good quality, customer satisfaction etc.