Having worked with many small businesses I often see the same simple mistake being made time and again. Clearly each business is not the same, but the fact that many business owners fail to have a global view of their business, is surprisingly common.
Wearing my accountants hat, I get to help organisations to manage and understand their financial position, however I can often tell from a few probing questions, that the directors only have a focus on one or two areas of their business; rather than a total view. For a business to be as successful as it can be, I believe it is important that someone in the business is keeping a “bird’s eye view” to get a complete picture.
Interestingly this is not just a small business problem, many larger businesses have the same approach, where departments fall into silo’s and there are too few people looking after the whole of the business. This is not only seen in the concentration of power in the hands of the C-level executives and the Board, but also in the org charts that show silo like operational structure.
I believe that some organisations need a fundamental rethink of their business strategy. Perhaps it is time to for organisations, large and small, to adopt a holistic business strategy that empowers more employees to think about the whole of the business.
As a business owner, there will be times when you come up against a financial obstacle that’s holding your business back. Often this is the time that many people pick up the phone and ask their accountant to come riding in to the rescue. But when you deal only with the one problem in isolation, you don’t get to see the full picture of what’s going on in your business. I believe that having a holistic view of the business can help an organisation to reduce costs, improve efficiency, nurture innovation and get closer to customers. By having a global view of the business, a business owner can focus on optimising and refining processes from end-to-end to promote efficiency and increase customer value.
I have seen the impact this approach can have on a small business. Rather than purely focussing on sales or costs, it is just as important to look at how improved internal processes and staff education can provide maximum customer value, produce operational cost savings, eliminate waste, improve efficiencies and increase accuracy.
One of the biggest challenges I see is the fact that most businesses are organised around disconnected business functions, such as sales, marketing, production, customer service, research and development, operations, finance, HR and the like. This function based structure may make sense on paper but it can cause employees to rarely look beyond their functional silos to see how their work impacts the rest of the business or the customer.
Getting all your employees to think about the bigger picture, is important in delivering a holistic approach to running a business. Perhaps a good starting point is to move the organisation from functional thinking (with its associated organisational chart) to a process mindset (with a process-driven hierarchy). Staff are often the biggest expense in any business but also the biggest asset to making it successful. It is not uncommon for business owners to get bogged down in the day to day running of the business and fail to take the steps to leverage their greatest resources.
Clearly a holistic view of a business covers many areas and I have only scratched the surface in these paragraphs. As a suggested starting point, you could start with revisiting and updating the business plan, identify the key internal processes and focus on improvement and employee engagement. As a business owner or director, it is worth asking yourself some simple questions to understand the current situation and establish the starting point for improvement.
- Have you identified clear short and long term goals for your business and developed a business plan and strategy to achieve these?
- Do all your employees all know the overall goal of the business, both short term and long term?
- Do your employees all understand the impact their role has on helping the business to achieve it goals?
- Are employees encouraged to suggest ideas to improve the business and increase the chances of achieving the goals?
- Have you identified processes that could be improved?
- Have you considered the use of technology to help streamline key processes and to breakdown cross functional walls?
There are clearly more probing questions that can be asked. From my experience, there are very few business owners and directors who have considered the above or can answer yes to all these questions.
I am however encouraged by the number of our clients who have already targeted 2017 for a step change in their business. We are of course always pleased to be asked by business owners for help in developing strategic business plans and to provide support to execute these plans. We are suggesting more of a holistic approach to the development of business plans and we are looking forward to seeing the impact of this approach with these clients.