Humans have the five senses of sight, hearing, touch, taste, and smell. When visiting the doctor, one of the tests performed is to be sure that these senses are in order. It should be no different for those in charge of a business. Yet this rarely occurs. So, at this midpoint of the year, take a few moments to diagnose the five senses of your organization, and write a prescription for improvement if needed.
A sense of purpose
Amazingly, not all that many organizations have a mission and vision that make sense. While the words might exist somewhere, they are often very vague and useless, or are so generic as to render them worthless. Unfortunately, many owners have no sense of what they are doing (mission), or where they are trying to go (vision). Look no further than FedEx for a company that knows not only what they do, but what they are striving to become. Any organization that was created as a college term paper, and is successful as FedEx can only be a shining example of what every business, regardless of industry, is capable of achieving. Even the smallest of organizations should have a mission and a vision that is clear, shows intent and makes sense.
A sense of organization
Any company of size has an organizational structure that includes reporting relationships, in other words, an organizational chart. To do without would be chaotic. Yet, in many businesses there may be employees that do not know who they report to.
Not enough organizations have written job descriptions for each position, identifying key tasks and related results. In some companies job descriptions may not exist, because the owner thinks that the employee should do “whatever I tell them to.” This is dangerous from many perspectives. Having something tangible for the employee to hold, read and refer to gives a sense of security and understanding where they fit into the greater intent and purpose of the organization.
Some organizations have written performance evaluations that allow for comments from the supervisor to those supervised and vice-versa. This process is not about giving or getting raises. A performance evaluation is about getting and making certain that employees understand what is expected of them and measuring performance to that standard. This process usually does not occur as often as it should. In some cases, it never happens.
A sense of order
A number of companies do things literally by the seat of their pants. The owner usually does not know what is going to happen from one day to the next. The business is not in control of its own destiny; it is in the hands of others.
Successful companies have processes and procedures for everything. Far too many owners refer to this as bureaucracy. However, these systems serve a valuable purpose: to efficiently run the business. A classic example of this is McDonalds. When Ray Kroc bought the hamburger chain, he did not think that the company sold great food. He saw and fine-tuned a system that allows you to get the same quality product at any location. When order is in place, and the process is teachable, then the firm starts to build a foundation for growth.
A sense of financial clarity
Flourishing organizations set realistic financial goals each year, quarter by quarter, month by month. These are measured and changes in strategy and tactics take place as needed. The focus is on profit and loss statements by product line, by customer, by state, by center, by sales representative, by broker, by office, by whatever measurements are needed to understand where the opportunities and problems are. Balance sheets (assets, liabilities, and equity) are measured at the plant, division, and corporate levels. Cash flow is projected daily, weekly, monthly and yearly.
Firms that are less successful manage their entire financial system by measuring the balance in their checking account, usually accomplished by calling the bank. Profit and loss statements are completed at the end of the year, when taxes are done. Balance sheets, unless prepared by the tax advisor, are nonexistent. Clarity for this type of organization comes by looking backward, not forward.
A sense of the long term
Thriving businesses have the intention of being in business for the long term. Decades are spoken of as if they are tomorrow, because for this kind of organization, it is just around the corner. They tend to think long term, but they act in the short term. Decisions are made today for three, five, ten and twenty years into the future, then executed so that the intention becomes reality.
Less successful firms tend to think and act short term. It is a shame, but many cannot see the forest because they are so busy looking at the tree right in front of them. They do not plan for more than a week or so in the future. Sometimes not even that far ahead!
