Imagine what could happen if while driving your car you spent most of your time staring into the rearview mirror rather than keeping your eyes on windshield and the road ahead. I’ll leave it to you to estimate how long it would take for something unfortunate to occur.
Now think about what happens to businesses that over-invest time and energy looking backward. Naturally, to safely drive a car, you do have to check the rearview mirror periodically, and businesses must do the same by reviewing financial and operational performance. But just as drivers must focus most of their attention on what’s ahead, so must a business.
After all, if you knew you were taking a trip, wouldn’t you pack?
If you knew a hurricane was coming, wouldn’t you prepare?
If you were putting up a building, wouldn’t you want blueprints?
Sure, plans can change, but a vision for what is to be built is necessary to get everyone on board and moving forward with the project. The same is true for all businesses — forward vision is critical to success.
Yet in the time crunch of day-to-day operations, small- and medium-size businesses often fail to plan. Here are four areas requiring planning that are often pushed to the back burner, rarely to return.
Risk assessment: It is fair to say that most business owners realize that to grow they must take risks. By planning ahead and systematically evaluating those risks, you will feel much more confident in your initiative and avoid wasting time, energy and money on something that isn’t worth taking a chance on, and equally feel prepared when something arises that has a risk because you have already determine a tolerance and comfort level with risk.
Innovation: Adding more of the same old same old isn’t likely to produce much growth for your business. You need to differentiate yourself in the marketplace and a great way to do that is with a new product or service, or a new, more efficient way to produce products or services you already offer. Yet many companies don’t take the time to plan how they will innovate – what culture they will create, what products, services or technology they will need, and how they will create a vision for their company.
Mentoring: To grow, your employees must grow as well — in their knowledge, in their leadership skills, in their understanding of the business. Many companies turn to formal training to meet this need, yet ignore a resource already available in the workplace that is inexpensive and custom-fit to their needs — mentoring. How much knowledge built through the years is available at your company, yet goes untapped, or is never transferred to the next level of leadership or teams?
Succession: Good planning means thinking about what comes next in the big picture, be that turning over the company to the next generation of the family, selling to key employees or selling to another company. Thinking about this can be emotionally tough for company owners to deal with, so they avoid it — especially when it is a family business. Family squabbles exist — ask any family business — but there are usually ways to resolve issues through discussion and by having a plan that everyone understands. Isn’t it better to have options that allow for the best exit, rather than leaving things to chance?
So, a business leader might say, how do I get these issues back on the front burner and begin to plan? That will be the subject of my next four columns — one for each of the areas I mentioned above. For now, think about how these issues are being addressed, or not, in your current business. Some of these even have application in our personal lives. I look forward to sharing more with you in the coming weeks.
Leisa Gill is director of marketing and leader of the Privately Held Business Segment at LBMC, the largest family of financial services companies based in Tennessee. Contact her at firstname.lastname@example.org or 615-309-2231