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Making Big Decisions: Will Doing Nothing Destroy Your Business?
By Rock LaManna, President/CEO, LaManna Alliance
Here's the scenario: You're the head coach of your favorite NFL team, and you're in the fourth quarter of the Super Bowl. Your team has the ball, and it's fourth and goal at the one yard-line. You have a very big decision to make.
Now you trail the game by three points, so you could kick the field goal, get the tie and force overtime. However, there are 50 seconds left on the clock, and the opposition has been moving the ball at will. If you kick the field goal and give it back to them, there's a very good chance they'll move the ball right down the field and kick another field goal for the win.
You call a time-out, and all eyes turn to you. It's time to make a decision. What do you do? What if you did nothing? Just sat there, crossed your arms, or even got in your car and drove home? It's unthinkable that a coach would do that. The consequences would be severe, but that's not the case for many business owners faced with a big decision.
For many, doing nothing is the preferred option to making those big decisions. Unfortunately, in almost every case, it can be disastrous. Let's review how "doing nothing" can impact every area of your business, from your business strategy, to financials, to your operations. Then we'll learn how you can make the right call, and guide your own team to victory.
How Doing Nothing Impacts Financials
His team presented him with a number of positive outcomes from the investments, but there were nagging inconsistencies as well. The numbers just weren't adding up. In the end, he did nothing. "It is perfectly correct for a businessman to say, 'Let's do nothing' until the facts or the situation is clarified," he commented. However, don't use that quote as a cop-out for making the big call.
The ideal situation is to have two options, with concrete consequences resulting from either decision, just like in our football coach scenario. Acquire enough quantitative and qualitative data to recognize your options and their consequences.
But what if you chose to do nothing? How will it impact your financials over the long run?
No business can stand still. You're either growing or you're losing ground. "Do nothing" long enough, and from a financial perspective, you'll find your revenues dropping, your profit margins dwindling, and your lender knocking on your door.
Just like the football coach who refuses to make a call, you'd eventually suffer the same fate: You'd lose your job, or in this case, your company.
"Big Decision" Financial Considerations
To make a big decision, be sure you have a solid grasp on these essential financial metrics. And while we're on the topic, let's next take a look at your operations.
Will Doing Nothing Affect Your Operations?
An easy concept to grasp, but most owners miss that doing nothing to improve your processes will have the same result. If you don't track quality metrics and establish best practices, and instead allow your people to do their own thing, the subsequent inconsistencies will hurt your company. Production schedules would be irregular, defects more frequent. Ultimately, morale would decline among your most precious asset: Your people.
Without a solid commitment to improving quality on an ongoing basis, your staff will become frustrated. It's hard to be committed to a company if there is no clear direction, and your processes are hard to follow. People want to do a job, and they want to do it well. As an owner, you need to establish quality processes to ensure that happens.
"Big Decision" Operational Considerations
Could all this data cause more confusion? It will if you let it.
Some owners, when encountered by too many options and too many variables, suffer paralysis by analysis. They become simply too overwhelmed to make a decision. Other owners will simply bypass the task of collecting data altogether, citing they're too busy to spend time on quality improvements.
Setting limits for yourself will help you avoid those mindsets. Determine a point when you have enough data to make a decision, and be sure you allocate resources (aka time) to the effort.
Will Doing Nothing Affect Succession Planning?
This "Do Nothing" conspiracy is unfortunate from a succession planning perspective, because it can have a dramatic impact. Financially, the delay of succession planning will cost you time. It can take up to 10 years to set up effective trusts, and the longer you wait, the more you delay the inevitable. You'll also likely see a dip in a company's performance if a smooth transition into new ownership isn't established, and the company isn't on the same page.
Emotionally, expect conflict on the home front. When there is a lack of vision (and in the case of an untimely death, a void in leadership), conflict naturally will arise. Families have been cleaved apart by family businesses. These nasty, often lifetime rifts can be avoided if business processes are established.
"Big Decision" Succession Planning Considerations
The Best Advice I Ever Received on Making Decisions
Owners are often wracked with fear and uncertainty about the outcome of the decision. The reason this happens isn't so much because they fear the end result, it's that they simply haven't considered what the end result could be. They haven't mapped out potential consequences of their decision, and the fear of the unknown is stopping them in their tracks.
Owners may have an indecisive personality, which is compounded by a lack of clear-cut data, timing and consequences. Even those with the strongest backbone will waver without these three items.
Yet with all of the qualitative and quantitative data in the world, if all options are relatively equal in terms of consequences, then it really doesn't matter what decision you make. It's what you do after the decision that really counts.
Let's return to our football coach as an example:
In each case, how the team plays after the big call will determine the outcome. Consider all of the elements discussed as you assess your organization and work to make the right call. Make sure you have quality data, both qualitatively and quantitatively. Then, if the decision isn't clear-cut, make your call and put all of your energy and effort into moving forward. If you and your team are committed to the decision, you'll prove that you made the right call.
Rock LaManna is the president and CEO of the LaManna Alliance, which helps printing owners and CEOs use their company financials to prioritize and choose the proper strategic transition - including mergers, acquisitions, organic growth, and exit / succession plans.
This article appeared in the SGIA Journal, November/December 2013 Issue and is reprinted with permission. Copyright 2014 Specialty Graphic Imaging Association (www.sgia.org). All Rights Reserved.
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