Operational Discipline Can Make All The Difference
Today’s business climate is nothing if not unpredictable. We’ve just seen the collapse of the nation’s 16th largest bank - one that services hundreds of small businesses - and we continue to see large swings in the labor market, and disruptions to our supply chains.
While many of these factors are not directly within our control, we as business leaders can put into place the operational discipline to help us better weather these storms. In fact, studies and our own experience working with dozens of businesses show that Operational Discipline is one the three corporate success factors that separate sustainable and profitable companies from those who are struggling.
How to Assess Your Operational Discipline
We begin our collaborations with new clients with a series of frank conversations where we can review strengths, identify gaps in best practices, and prioritize areas for improvements. This framework covers several researched benchmarks and best practices that span strategy, talent, and operations.
To get you started right now, we are sharing just a few of those benchmarks and related questions you could ask yourself to gauge where you might need to focus more of your attention.
Investment Management and Optimization
“Successful companies have three to ten times the cash on their balance sheets as their peers even when they are very small.”
What is the plan for capital infusion to support growth goals? How are you managing risk?
What would your plan look like if you had to operate and survive for an entire year with no revenue?
Infrastructure and Delivery
Do you have an effective channel strategy with more than one channel to deliver products and services?
What kind of infrastructure are you reliant on (e.g., technology, warehousing, production space, shipping, storefronts), and who is responsible for maintaining it (internal vs. outsourcing)?
Governance, Oversight, and Decision Management
“Companies are 2.4x more likely to grow if they have some oversight by impartial parties (independent board members, financial auditors, etc.)”
Do you have a process to enable you to make clear trade-off decisions to maximize resources for growth? For risk?
What oversight bodies or functions do you currently have to support fair dealing and help identify and mitigate risk?
We hope this sheds some light on some proven focus areas to help you stay successful during these challenging times. If you would like more information on reviewing your company’s operational discipline, please contact us.