Are you drumming up business and putting out fires all day? Do you feel that you aren’t making any progress, but taking two steps back for every step forward? Do you change directions after each customer meeting? Should you bid on every possible deal, regardless of how relevant it is to your business? Unfortunately, situations like these are not at all rare.
Many of the organizations I work with have experience with several of the above situations. Everything may seem to be both important and urgent, and they may change directions constantly. Problems abound for staff members, who are uncertain what to prioritize, what is important, what is urgent, which assignments will get them closer to their goals – and which won’t. The result is often an overworked organization lacking in motivation.
I have experienced this personally when the CEO returned from a meeting with a potential major new customer, ablaze with excitement. “It’s time to hire new staff in a new department! Let’s start developing our products to fit this new customer!” Never mind that these changes are unplanned and inconsistent with the company’s profile, marketing, and current areas of expertise. The deal is too close not to take it! I call this approach “management by the last customer meeting”.
It is important to listen to your customers and be prepared to make adjustments to your operation in order to obtain new business. Otherwise, you may lose relevance as a supplier in the long term. Imagine a hairstylist who only gives 80s-style haircuts, or if Volvo were still selling the 740.
So how do we reduce the need to put out fires, and what are the underlying causes?
Naturally, many things may cause a business to take an ad hoc approach, and many things are indeed urgent. Some causes are preventable, while others are harder to predict. But with the right expertise and methods, you can significantly reduce the need to put out fires. Doing so will also bring huge benefits, like the positive feeling of getting closer to your goals, increased satisfaction and happier employees. Not too shabby. So let’s have a look at the most common causes.
1. No direction and no goals
Many companies out there actually have neither a vision nor goals. As a consultant, I have met with businesses where I’ve had to explain to the owner and CEO that as the owner, he is the one who determines the direction of the company – not staff members. Of course it is important to have a direction that feels relevant to all employees, but there is an important point to clarifying the different roles: what do the owners do? What does the CEO do? How is the operation governed and led?
It is the owners’ role to equip the board of directors with owner directives that indicate goals for profitability, growth, and any other goals the owner wants. Then the board of directors reworks these into goals for the CEO, whom they appoint to execute the strategy to achieve the established goals. This also applies to small, owner-led companies, even if one person is owner, board member and CEO.
Direction and goals are essential and should be worded in such a way that is engaging for all stakeholders. Not many people are particularly motivated by goals like “40% equity ratio” and “7% operating margins before tax”. However, “achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth,” as John F. Kennedy said in 1961 – now that’s a goal that will really engage everyone who comes into contact with the operation, from banks and suppliers to customers and employees.
So to avoid having to put out fires, step one is to have a clear direction and clear goals.
2. Too much to do
The next problem I tend to see with customers is that they want to do tons of things, usually all at the same time. And it is all urgent. Less consideration is given to the fact that they do not have enough resources, if this is even understood at all. When there is much to be done, the fire brigade may need to be called in constantly to handle the latest emergency.
What is the solution to this problem? Prioritization. Without clear goals and plans to achieve them, prioritizing is difficult. There are many tools to use. One well-known tool is a strategy map, (Kaplan & Norton, 2000) which is used to determine the organization’s critical success factors (CSFs). These are the things we must be good at in order to achieve our goals.
Once we have obtained our CSFs and have the map drawn up, we can see all the connections. Then we can set clearer priorities, allowing us to be clear with employees about what is urgent and important, and what is less urgent and less important.
When we have an overview of our priorities, satisfying them becomes possible. You won’t feel so overburdened, and you can work more systematically to achieve your goals. It will also clarify whether any skills or equipment necessary for achieving your goals are missing.
The second step is to have a clear strategy that facilitates the prioritization of resources.
3. A rapidly changing world
I recently spoke with the chairperson of the board of Hemmakväll about the enormous changes they have experienced. As we know, they transitioned from renting out movies to essentially being a candy shop. This change occurred because as streaming services replaced DVDs, the world changed. Fortunately, the change was gradual and they saw it coming, which made it manageable. Consider what clothing stores have dealt with during the coronavirus pandemic. There was no time to restructure as sales took a nosedive. And transitioning from a brick-and-mortar shop to online sales is a huge adjustment that not everyone can handle.
So how do we handle a changing world? This is a task for the whole organization, but the board of directors has particular responsibility to ensure both the operation and board actively work to gather business intelligence. This needs to be done systematically. In addition, a process is necessary to handle both input and output, in other words, to successfully obtain and analyze information about the surrounding world while effectively adjusting strategies, goals and action plans accordingly.
Dimensions that must be monitored include customers, competitors, industry, key stakeholders and macro trends. Numerous tools are available for efficient business intelligence gathering, including trend-spotting, scenario analysis, PESTEL and Michael Porter’s 5 Forces analysis (Porter, u.d.). If your antennas are out and you have a good process in place, you will be able to notice changes early. As the Romans said, praemonitus, praemunitus – forewarned is forearmed.
The third step is to keep track of the world around you.
4. Poor oversight of internal resources
It happens to the best of us: you develop new strategies without a clear understanding of what internal resources are needed to put everything in place. It has happened to me. I was working at an IT company in Canberra, Australia around 2005 and we developed a new strategy to digitalize our service offering. When it came time to implement the strategy, we realized that a key component was an IT system from the UK. The only people who understood the system lived in the UK. We had to bring in two consultants from the other side of the planet to work with us for several years. It was an expensive lesson, but the result was good and paid off. I learned the importance of having a detailed understanding of the necessary resources and skills to get where you want to go.
If you do not know what resources and skills you need, this can often result in assignments landing on “someone’s” desk. “Someone” who is neither competent in these tasks, nor interested in them. Thus they can often become low-priority tasks – and then suddenly, you have an emergency fire to put out. To avoid this scenario, you need to keep track of your internal resources, including your liquidity, balance sheet, expertise, IT systems, production resources and staff.
The fourth step is to keep track of the internal resources required to achieve the goals.
5. Poor processes and planning
It isn’t fun to admit, but often, having to put out fires is the simple result of being bad at planning. We don’t have enough project management experience in the management group. If everything discussed above is in place, it is not enough. We still need to plan the business and follow up to ensure tasks are completed.
With clear processes and metrics, you can prevent a lot of fires. Sure, developing business processes and work methods involves challenges, but the benefits are enormous. The processes require preparing a few key elements.
We must be clear on what the process will involve and from whom,
what the expected outcome is and for whom, and
how we will measure the result.
With these three elements in place, we can prevent many problems from arising in an organization.
We also need operational plans that support the goals, strategy, strategy map and CSFs, and that give consideration to internal resources, with sufficient flexibility to handle input from business intelligence gathering. This is about as simple as the last sentence was long. In other words, it is downright complex for most operations. That is why it can be nice to have a sounding board who has experience with these issues in many different operations.
The fifth step is to have clear business processes that include follow-up. And to plan the operation.
6. Conclusion – how to avoid fires
Have clear long-term goals
Have a clear strategy that allows you to prioritize resources
Keep an eye on the world
Keep track of internal resources
Have clear processes and be good at planning
Have a sounding board to provide help, with experience, methods and tools
Are you interested in learning more about how to work with strategies in an everchanging world? Check out our webinar on Agile strategy.
Bibliography
Kaplan, R. S., & Norton, D. P. (2000). Having Trouble with Your Strategy? Then Map It. Harvard Business Review, 78(5), 167. Hämtat från https://hbr.org/2000/09/having-trouble-with-your-strategy-then-map-it den 25 9 2020
Porter, M. (u.d.). The Five Competitive Forces That Shape Strategy. Hämtat från The Harvard Business Review: http://hbr.org/2008/01/the-five-competitive-forces-that-shape-strategy/ar/1 den 25 9 2020