It’s tough to ask for help, and it’s even tougher to ask someone to look at what’s going on in your own patch.
Scrutiny and spotlights are not things most people invite into their lives on a regular basis. It feels too confrontational, too invasive.
We also get scared about what we might find. As a supplier, if you were to find out that your business had lost so much margin, so much value, over so many years, all while you were at the tiller, it would be embarrassing, disappointing and even maddening.
However, in return for some discomfort, much reward can be discovered. …
It is often easier to point a finger at external causes. “Our poor financial performance is really due to the lack of growth, changing consumer trends or uncontrollable forces such as energy prices or category disruptions.”
Let’s assume you own a home. Part of the cost of “pride of ownership” is regular maintenance on the house—painting, patching wall damage and fixing plumbing leaks. You do your best to catch problems before they arise, so that you aren’t out of pocket thousands of dollars on what otherwise would have been unnecessary rectifications.
Margin erosion, or value leakage, in your business is like a leak in the pipes under the floorboards of your home that can appear anywhere, anytime, in any part of the house.
If you’re doing a routine sweep for plumbing leaks, there’s every likelihood you’ll find problems before they get too bad, and, in this instance, rot your foundations. You’re able to call a plumber to come out and get the leak fixed before major damage is done.
As a B2B supplier, it’s critical that you review compliance across your customer contractual relationships on a regular basis. By performing this routine maintenance, you put yourself in a position to find and fix emerging value leaks before they escalate.
Prone To Blind Spots
As human beings, we all have our blind spots. People we have trouble understanding and situations we struggle with, if left unchecked, do not just go away.
Businesses, and the workplace as a whole, encounter the same problem.
How readily will a sales director admit that his negotiation skills need some improvement to deal with an agile, more sophisticated customer procurement team?
Or how often will a logistics manager acknowledge that his under-utilised warehouse space could be leased out to a third party, rather than reserved for “just-in-case” moments?
What about inventory holdings? Does a planning manager ever admit that his demand forecast accuracy is insufficient, resulting in millions of dollars being tied up in working capital?
It takes a lot of courage to self-examine, and even more courage to invite someone else to examine with you. But the fact is you can’t form a true 360-degree view of yourself without inviting someone else in. You simply can’t self-generate the broader perspective.
At the time of writing this article, Dustin Johnson is the world’s number one golfer. He employs two swing coaches and a trainer on his team, as well as his full-time caddy. He, along with other top golfers, always strive for incremental improvement. Professional golfers don’t hesitate to engage others to break down their game and rebuild it.
If you choose to ignore the power of having a coach look at your swing, you won’t get any better at driving the ball. You can’t assess your own swing while you’re in the middle of doing it.
And all the information you find through Google won’t do you any good either, as it’s still self-diagnosis and not a third-party view.
Great businesses are brilliant at what they do, and yet, more than that, they’re not satisfied with being good enough. Instead, they are continuously committed to being better.