Do Nothing

I am a fan of ‘do nothing‘.     do nothing

Many a rainy Saturday in place of doing that home improvement thingy, visiting a friend or going to a movie – I have elected to do nothing.  On a personal level I support you all and appreciate your support.

In business, I do not support that choice

choices       As a business leader when you are considering

a new market
– how to respond to a competitive threat
– a market shift
– a customer complaint
– growing faster or slower than forecast
– improving a process, product or service
– acquiring or being acquired

and so on, you have standard options.directions

  1. approve the change
    • new market, responding, answering, expediting/slowing, optimizing, buying or selling
  2. reject the change
    • either back to the drawing board or select another option
  3. do nothing

Both 1 and 2 require a risk to be taken a reward to be gained.

Number 3 avoids risk.

Untrue.wrong

See with 1 or 2 the person proposing the change has in some level of detail (or lack there of) stated the risks and how their proposal will over come identified risks.  Along with the rewards – ROI via growth of revenue and/or profit.

There is also yourself as the approving business leader or your devil’s advocate

love finance(often those Finance type people – whom I love – no sarcasm, actually love them)

will provide the counter argument

stating by rejecting this change in place of another option that has either or both a higher ROI and less risk.

Strangely, rarely have I seen where number 3 is evaluated with the same detail.

The main exception is related to compliance requirements where the do nothing risk is a fine or worse.

As such, choosing ‘do nothing‘ is horrible for your business.  The choice is not based what is better for your business as you have no evidence (risk analysis or ROI) that it is a good choice.  It certainly is not a bold choice.

choose do nothing

Yet, with only the evidence of my experience and those conversations with colleagues and friends, I would submit that ‘do nothing’ is the most often option that business leaders choose.

Leaders need to be aware of the risk of this avoidance behavior.  It is not safe, it is backing yourself into a corner.

Business leaders who are proposing changes, need to account for ‘do nothing‘ as a competing option to that new market, competitive response and other changes they are striving to accomplish.

Oh yeah, delaying a decision

  • putting off to next quarter due to other priorities
  • looking at this at the end of the year
  • requesting the proposal to be more detailed
  • need to add additional options

is the same as ‘do nothing‘.  Just ‘do nothing‘ now, but we  really plan to

do something sometime‘.procrastnator

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Rule #5 – The 3 Shares

As a customer, I would categorize my vendors into those two segments right off.

A commodity vendor (ex. Paper, toner, etc…) were valued based on price and delivery. Therefore, I could minimize their impact to my bottom line only.

A strategic partner (ex. Developer, marketer, etc…) were valued based on their direct contribution to my top and bottom lines.

As such, the strategic partner is called into a meeting to discuss the 3 shares.

Shared values – partner understands your goals, their role in achieving your goals and their overall mission is to support their customers goals.

This goes beyond just going, ‘yep sure, we want the stuff we work on with you to help you grow or save you money’. The vendor’s own mission or value system must be to directly support their customers growth plans.  It not be prepared to walk away.     

  • Not a supporting value statement – Our vision is to be recognized as a global services innovator, helping customers realize the best results.
  • Supporting value statement – we focus on superb delivery of solutions that achieve business result

Shared benefits – As that partner, if I am impacting their growth the effort I am engaged with the customer must delivery 10 times or more the expenditure my customer is paying out. If it is impacting the profit line, then at minimum 2 times that expenditure. If both, well you all can do the math.

As a customer, I can breakeven on these projects, engagements, initiatives by using my internal employees. The direct benefits must be measurable impact on my growth and/or profit.

On the other side of that coin, I as the customer must understand that you are NOT a commodity vendor. You are a partner and as such price is not the top priority in our relationship. Impact is, right!. Therefore, I as a customer should acknowledge that I need to be a profitable customer to my strategic vendor partner.

This provides two direct benefits.

  1. No other way of saying it. As a vendor, I know which customers drive my profit and whether I state it or not, those are preferred when I have to decide between satisfying one of two customers.
  2. Also, you want your partner to be healthy with a strong bottom line. If they are pinching penny’s (okay dollars now) they will be distracted from you and if they suddenly close up shop that can be very painful if you are in the middle of projects.

* tip – not safe for work if you search for bottom line images on Google.

Shared riskcustomer and partner share the risk of an endeavor.

This is where the vendor partner has to put money in the game. Often in an engagement, project or other activity once you move past 25 to 33% of the project, the customer now has all the risk.

However, if you balance the risk, by contractually agreeing that payments will be based on deliveries and tie the project plans to ensure that at each project gate there is a deliverable that is valued by the customer to be worth 75% of the current payments to that gate.

And of course, the big part of this is the hold back at the end of the contract, to ensure that the deliverable delivers a measurable impact which is normally 30 to 90 days after completion. The hold back should be substantial enough to have the partner in the game through the end gate and not just up to it.

Rule #2 – There is always more money there is never more time – reposted

I originally posted this in November 2010, but as it is formally rule #2, it will follow rule #1.

The phrase ‘time is money’ holds evermore true in the global economy where time zones have been removed as constraints to commerce. Even in our global depressed economy there is not fair balance between time and money.

Regardless, of your time management techniques, methodologies or process discipline you cannot –

  • Create
  • Save
  • Make
  • Manage
  • or Control

TIME.

Anyone who professes to, is comparable to someone saying they can change the past or make a pitcher throw a strike in the instead of walking that first batter in the bottom of the ninth. Sorry, a distraction there regarding the current playoffs. However, you can create, save, make, manage and control MONEY. You can use what money you have now to make more. You can use save the money you have now to use later. But, most importantly, you can use money to have an activity take less time by getting the right expertise, quantity of staff or tools. So, to restart – there is NEVER more time, but there is ALWAYS more money. Yes, even now.

The value of time – 

This statement about money and time, I have used during my career to help guide me on decisions. Whether the decision regarded hiring, firing, budget allocations or what client to work for or not. It is part of my value system. If you do utilize this value statement as I have, you must accept the following explanation of the statement.

What is money? In business, money is the item we use to exchange for our goods or services. Money can be cash, receivables (billed, not paid), a credit line, an asset, a loan or an investment. The business invests all of the previous lists of money in people, facilities, equipment, raw materials, services to vendor and taxes, of course. These investments are planned, analyzed, considered, debated, refined, measured and tracked to grow a business. At times, the investments may be to forestall a competitive advance or meet a government or industry compliance requirement.

Even if the investment decision is to meet a compliance requirement, it is still made and the money spent to help the business grow, as begrudgingly as the money is spent on this compliance, it does so to allow it to continue to grow. The balance between the money spent and the growth achieved is the challenge every business struggles to be on the positive side. Tracking, measuring, forecasting, budgeting, banking, reporting and so on all about money. Upwards of 80% of a businesses reports are configured to report currency. How much money did we spend, get back in return (ROI) and/or what advantage did the money deliver.

Now what is time? Regardless of business or non-business, time is only the now or later. Today or tomorrow, this week or next, this year or 10 years from now are other ways to say it. But, they all mean now or later. We could get into Einstein’s theories on time, but for me there is right now or later. Time can be measured and tracked. The amount of time can be planned, analyzed, considered, debated, and refined. Some investment of time is always needed when there is an investment in money.

However, this where the large difference in money and time, time and money comes to light.

You have up to 80% of reporting in a business regarding money, that leaves only 20% for time, but in truth time reporting is 5% or less. The other 15% is made up of reports on material, people or facility quantities. So with all this attention, prioritization and focus on money, does business consider time as a major component of their decision making?

Most do not consider time as a major component, more as an afterthought. To use my value statement of ‘There is always more money, never more time’, a business must make time more than an afterthought.

More money can be made, found, borrowed, heck even stolen

Legal Disclaimer – I do not recommend, condone or suggest that stealing is acceptable, ethical or something you should do – so no blaming me for getting caught

, but time cannot be made, found, borrowed or stolen. The phase ‘make more time’ is false. An allocation or assignment of more future (later) time is possible. But, a there is no way to make or give more time. This is the important basis to use this statement as part of your value system in making decisions.

The final point here is that spending the correct amount of money, on the correct material or service at the correct point in time can reduce the amount of later time a business uses to attain some growth. A project the business decides to spend money on and to hire expert consultants to perform part of the project, reducing the ‘later’ time the project will take to deliver the return on the money investment or a business decides to spend more with a local supplier to ensure ‘later’ time deliveries have a higher likelihood of on time delivery. The important part here is to create metrics and reporting that validate that the ‘later’ time was saved based on what you value time as, thus back to money. Time is worth money and money is worth time – a business needs to consider both equally.

What do I want to say – that spending money is almost always worth it if you can reduce future ‘later’ time.

What do I want to people to do – start considering time more when they make decisions, especially on where to spend money. How much ‘later’ time will this money save if I spend it now versus spending it when ‘later’ comes.

Especially, when you consider a proposal and decide to cut a component of the proposal to make the proposal fit into a money constraint. Take the time to consider what that reduction means when the future comes around and you may need to spend that small amount of money you cut anyway. Yes, you may not have had to spend any more money, but I would put a dollar of my money over a minute of my time that decision cost you twice as much time.

Time is just as easy to track as money.

Ask yourself how much of your decision making data includes time oriented information.

Some other thoughts by others on time vs money –

thinksimplenow

Marketing Wharton School

Forbes

Attain Business Process Improvement without a new ERP

When considering a return on investment for the major purchase of a new ERP system, the top ROI item is always the best in class processes that your organization will be able to adopt with the new ERP and the productivity improvements that will generate increased profitability. With the current economic conditions many companies are putting their ERP projects on hold. Extending the life of their current ERP, CRM and other bolted on solutions. While putting the new ERP on hold allows the company to save the capital investment dollars, it does not provide the high return that improved business processes deliver not just to your bottom line, but to top line revenue growth an improved customer relation process will deliver.

What if you could attain a large part of the process improvement, with your existing ERP. Consider with current Web 2.0 and Business Process Management technologies you can map your current business processes, compare them to industry best practices and integrate with you existing ERP solution. Leveraging both innovative new technologies and your fully depreciated existing technologies. This effort still requires capital investment, but the investment can be at a much smaller initial investment and deliver immediate return within 1 to 3 months versus 12 to 24 months in a full ERP implementation.

To gain productivity improvements that will deliver to your bottom line, business process transformation is key. To protect your top line revenue through improved customer processes that link you closer to your customers you need to transform your processes to differentiate yourself from your competitors. Re-evaluate successfully attaining your ERP project goals and objectives through an exploration of transforming your business processes while still keeping your existing ERP.

ERP – stands for “Enterprise” Resource “Planning”

Rarely have I seen an implementation of an ERP that is fully implemented across the enterprise, thus reducing the ability to be a high performing planning tool. There are many reasons why organizations do not fully implement their ERP solutions. But, how many of those organizations have measured the negative impact of a “Partial Enterprise Resource Planning” solution on their organizations growth and profitability.

Are these questions that your organization cannot answer yes too?

  • Has the ERP solution provided a quantifiable improvement to your speed to market?

  • Has the ERP solution eliminated all duplicate entries of customer, vendor, inventory, employee, forecast and other planning data?

  • Has your organization re-engineered and automated key business processes?

  • Has the ERP solution created a standard data management process for corporate data entry, change criteria, and archiving?