Of late, I’ve become aware that too often many businesses are finding themselves out of sync. In a period of economic upheaval such as the current state of affairs, this is no surprise. Yet few possess the ability to make sense of their own internal reported information relative to the external reported economic indicators. It’s not merely a problem of innumeracy, or the reality that buyers are as irrational as sellers. I learned that 90% of American business executives/owners recognize that they need to invest more aggressively into developing meaningful business indicators, yet fewer than 60% have taken actual steps to do so.
This morning Public Radio after sharing the news of Walmart’s stunning ability to reap profits reminding many other business owners of the possible in spite of their own inability to replicate these returns, singled out two key indicators for any American business to monitor.
The attached interview (poor sales hurt jobs numbers) makes a strong case for watching consumer spending, a leading indicator of one of the key drivers of the US economy followed by unemployment.
Well, in a world where increasngly people have no interest in being sold and managers and CEOs are all too familiar with the consequences of falling revenues as they may be the next one to end up in the unemployment line, what should and can a business do?
One thing is to take a look at their own data and try to align the indicators being collected with activities that are associated with creating business value or more directly customer value. Maybe they need to houseclean and stop wasting resources on reporting data that is no longer proving prescient or worse is never even reviewed. Given the current phase of the economic downturn, time may be close to up for embarking on a large planning and review session. The best resources for the task however can always be leveraged quickly. Any business savvy enough to engage its entire organization to constructively offer up their ideas, and realities. This is what James Surowicki characterizes as the Wisdom of the Crowds.
Good news is that no one has to pay to try this. The wide availability of facilitation tools for just such an idea exchange suggest it’s worth trying. There’s plenty of open source software platforms to lead the way, every organization should readily be able to tap at least one person with the necessary experience, after all the tools are pretty ubiquitous these days. Help may be needed in the proper evaluation, and review of the ideas that will surface, creating a process to help prioritize what among existing organizational activities should be continued and for how long. The savings achieved from mobilizing internal talent to quickly retool the business activities may be sufficient to keep the existing workforce employed. I say may because every business is different. But once the firm’s priorities are made clear , including how promises to staff follow you’ll be amazed at how easily folks adjust. Because people would rather be part of the solution rather than part of the problem. Try to avoid backsliding to old decision making habits that are beyond the organization or held closely by the few at the top of the organization. There’s nothing worse than having double standards where a protected class of management repeat the process that ultimately led you into a false sense of security, filled with false projections and failed to help adjust the ship even when they heard the reports of the approaching storm. If this team also makes decisions as to where costs should be cut, you need to think twice. I suggest that the reason consumer spending matters is that in the end we are all consumers and if we understand why we are or are not spending or what makes us buy what we do buy then we might be able to take that insight and apply it to help our own organizations align their processes to better meet and address all of our collective needs.