Share on linkedin
Share on facebook
Share on whatsapp
Share on twitter
Share on email

Could your business fail on YOUR watch?

Article:  By Dennis Keay

It saddens me when I see business owners suffer, particularly when they have a long-standing family business and it’s going down the gurgler…perhaps unnecessarily.  I say ‘unnecessarily’ because:

  • they know they need help
  • they poorly self-diagnose the problem
  • they only see one potential solution which isn’t available to them
  • they’ve convinced themselves that they’re too busy to consider other potential solutions
  • other potential solutions are available to them.

Here are some brief case studies of two family owned businesses, of similar size, with similar problems, but one willing to make the time to consider solutions, and the other ‘too busy drowning’ to contemplate alternative solutions. The scenarios are real, but names are fictitious.

Case Study #1:

I received a call from Jan, a business owner whom I’ve spoken with before. She’s always been interested in discussing their situation and problems, Jan and her General Manager (John) have been ‘too busy’ to take the next step of letting us help them diagnose and treat the root causes of their problems.

The call from went like this:

“Oh hi, Dennis…just wondering if you know of any good tradespeople looking for a job. We lost another one yesterday and we’ve had ads out for a while to recruit more people, but no-one is applying.”

“Sorry, Jan, I don’t know of anyone, but what I might be able do is help you increase productivity so that you can do more with the resources you have.  How about we arrange a 15-20 minute Zoom call with you, John and me to see what might be possible.

“I’d love to, Dennis, but John’s drowning at the moment and I can’t weigh him down with anything else.”

“Jan, here’s the situation as I see it:  You’re in a boat with a lots of holes in it, some below the waterline and some above. The boat’s been sinking for a while and you’ve just lost another bailer so the boat’s now sinking faster. You and John are bailing like mad, and you’ve called me to see if I know of any good bailers that are available.

Jan, everyone’s looking for bailers…there’s none available. However, I’m REALLY GOOD at plugging holes in sinking boats. That’s my speciality! But, I can’t help if you’re not open to that as a potential solution.”

Jan hasn’t as yet taken up the offer of the free Zoom call.

Case Study #2:

I was contacted by Dave, the owner of a family business with 12 employees. The business is over 10 years old and has been barely staying afloat. It has been propped up from Dave’s personal savings and things have been very stressful for him and his family. He told me about the type of business he has, some of the issues, and the revenue, all of which have been fairly stable over the last 3 years.

Dave had tried various things to improve the business but nothing really worked. He knew something had to change…but didn’t know exactly what or how. He couldn’t get jobs out the door fast enough, and had an advertisement running to try and recruit another tradesperson…thinking that that might be part of the solution.

“Dave…you’ve been super busy but making zero profit and not paying yourself for at least the last two or three years. Unless you fix the underlying problems {plugging holes in a leaky boat}, hiring another person might just make things worse…an extra expense to the business with no guarantee that it will do anything to the bottom line. How about we invest a little time, do a diagnostic assessment and some financial analysis, and identify the best course of action?”

Dave was up for it. We did the assessment and quickly identified 3 game-changing areas we forecast will transform about 15% of their current revenue into profit in Yr 1 (via productivity gains), and 20-30% into profit by end of Yr 2 (via productivity gains + revenue improvement).

The Point

We can’t solve a problem with the same thinking we used when we created it.

Einstein

As humans, we don’t know what we don’t know, and sometimes we’re too close to our own problems to be able to objectively diagnose their root causes. Self-diagnosis can be a dangerous thing!

It’s also easy to jump to conclusions or ‘solutions’ based on self-diagnosis. If the diagnosis is wrong, there is every chance the treatment will be wrong too!

The point is, it’s often in your best interest to make time to at least get a second opinion. This could be the difference between having a business that goes on to be a legacy for future generations, or, unfortunately, fails on your watch. Making time is simply a leadership decision, based on prioritising Important over Urgent! It’s biting the bullet!  If your business was on fire, or in a flood, you’d prioritise taking immediate action to protect it. You’d make the time, no questions asked!

Case studies #1 and #2 highlight the difference in potential outcome of making such a decision: staying stuck and suffering, or, having the opportunity to make a significant positive change and stop the suffering and the struggle.

Change is not necessary… Survival is not mandatory!

W. Edwards Deming

I won’t go into the details of the recommendations here for Case Study #2…we’ve only just completed the Diagnostic Assessment & Recommendations. Implementation is about to start, so no results to report as yet.

However, if you’d like to see the types of results we HAVE achieved with other businesses, you can check out:

Client testimonials

We have also created an online tool where you can run a Diagnostic Assessment on your business and get some actionable recommendations. You can view details of it here.

Business insights

Not receiving your weekly dose of Lean Logic business improvement articles? Subscribe below for more articles like this one delivered straight to your inbox.