Whenever you must create or reinvent the direction of your organization, there are six questions, in order, that you must answer correctly. You’ve heard the expression “garbage in, garbage out.” The quality of your thinking and decisions is determined solely by the quality of the information you begin with.
1. Where are you now? What is your current situation? If your business was in trouble and you hired an outside consulting firm to come in to help, the first thing the consultants would do would be to determine your exact levels of sales in every product/service area, the relative profitability of each of your products and services, the trends in each area, the amount of money you have and will have in the foreseeable future, and your position relative to your competition. These are all pieces of information that you can and must generate for yourself.
2. How did you get to where you are today? What were the factors and decisions that led to your current situation? Be your own management consultant. Be prepared to face “the brutal truth,” as Jim Collins calls it, about how you got to where you are today. Refuse to flinch or exaggerate, especially when you have problems with sales and profitability.
Jack Welch insisted his managers practice the “reality principle,” which he defined as “being willing to face the world as it is, rather than the way you wish it could be.”
You cannot resolve a problem or resolve a difficult situation unless you have the courage to face the current facts squarely whatever they are. Reevaluate all your business activities. Is everything you are doing necessary to win and keep customers? What savings could you generate by partnering with other companies to do work or carry overhead? Could you hare a warehouse or manufacturing plant with a neighboring firm? Can you hare an accounting department? What activities would you outsource without reducing quality or service to your customers?
3. Where do you want to go from here? What do you want to accomplish? Clearly describe the ideal desired outcome for your business. Project forward five years and imagine that your business was perfect. The greater clarity you have about where you want to be at a specific time in the future, the easier it will be for you to create a great business plan, or blueprint, that will enable you to get from where you are today to where you want to go. Be specific about your future goals and desired outcome. For instance:
• How much product would you be selling five years from now?
• How much would you be earning (gross and net), and how does that compare with your competitors?
• How many people would be working in your business?
• Who would your customers be, and where would they be located?
4. How do you get from where you are today to where you want to be in the future? What are the steps that you will have to take to create your ideal future business? Make a list. Write down every single thing that you can possibly think of that you would have to do to achieve your goals in the future.
5. What obstacles will you have to overcome? What problems will you have to solve? Of all the problems or obstacles standing between you and your desired future outcomes, what are the biggest or most important? If you weren’t already a fast-growing, highly profitable company, why not? What is holding you back? What are the critical constraints or limiting factors for growth? Sometimes, just identifying and removing one critical block or obstacle can turn your company into a more profitable enterprise.
6. What additional knowledge, skills, or resources will you require to achieve your strategic objectives? What additional competencies or capabilities will you need if you want to lead your field in the years ahead? Every business begins and grows around a set of core competencies, but there are almost always additional core competencies that you’ll need to acquire or develop over time. If your company is already the market leader, then explore what new areas you can excel in. Most of all, ask yourself what you can do, starting today, to begin to achieve those core competencies to create your business of the future.
This article is excerpted, with permission of the publisher, from Now, Build a Great Business: 7 Ways to Maximize Your Profits in Any Market by Mark Thompson and Brian Tracy. Copyright 2010, Mark Thompson and Brian Tracy. Published by AMACOM. For more information: www.amacombooks.org