Business Intelligence and the Need for Action By David Saint-Onge
This article is a re-printed from the February 2011 edition, as approved by the UP Business Today
There comes a point in the evolution of every small business when the entrepreneur realizes, perhaps for the first time, he/she has lost control of their company. It is as if a single light bulb has lit a dark room.
tion. Heck, small businesses around the country raise the standard of living in the communities they call home. But make no mistake; the talents of an entrepreneur are limited. In reality, entrepreneurs are often mediocre managers.
der why the business is not growing the table that overshadows their or is not as profitable as it once was. own.
You’ve probably seen the signs each day at the office, but weren’t sure it was as serious as it now seems. Your staff does not carry out your orders as diligently as they used to. The general level of excitement amongst the staff is eroding. Staffers are leaving earlier and earlier each day, and they arrive later in the morning. The passion for success just isn’t what it once was. When you begin to think back on it, maybe you missed the signs or maybe you simply chose to ignore them.
There's a tipping point for successful businesses when good entrepreneurs learn to turn over the reins of their company over to professional managers. Take Larry Page and Sergey Brin of Google. Despite the organic growth of their company and their many successes, these two entrepreneurs stepped out of their own way and let their company grow. I once tried to expand one of my businesses by starting a new office in a different geographic region using a trusted colleague. Despite early successes our business did not expand even though the local economy was growing substantially around us. What I came to realize is that my colleague was good at starting an office, but he did not know how to grow an office. All the effort and money expended went for naught.
Time management. Every business owner needs to assess how his or her time is spent. As the business grows, the owner needs to shift from an operational role to more of a strategic, big-picture thinker. The quicker that happens, the more the company will grow. Most business owners remain stuck in the day-today rather than long-term strategy. They need to learn how to let their staff get better at their jobs so critical operational decisions once only made by the business owner can now be made by staff. This shift in decision-making allows the business to stay efficient. I will be the first to agree with the notion that many entrepreneurs are Business procedures. Often in the quick to acknowledge; it’s my comstartup phase, small-business own- pany so I will do with it as I please. ers fail to create essential standard- Business owners have every right to ized processes and procedures. It is either push their companies to be obvious that when a business the best they can be, to let it cruise grows, there is more data and infor- along on automatic pilot, or to drive mation to be assessed and evaluat- it into the ground. These are coned. A lack of organized and scious decisions with real ramificacentralized processes only serves to tions. But at the end of the day, it ensure the entrepreneur becomes takes real business intelligence and the bottleneck. a reborn entrepreneurial spirit to assess the strengths and weaknesses Management team. It can be ar- of your business and your managegued that most individuals can man- rial skill-set to grow an established age three to six people effectively. business. It takes an entrepreneur to Any significant increase in this total start a new venture, but it takes a only serves a loss of control. In successful entrepreneur to get out of these instances it becomes inevita- the way and let the business grow. ble that delegated assignments do not get completed. It becomes es- By-line: David Saint-Onge is Pressential that a growing business ident and Principal Strategist for needs an internal infrastructure that Black Ink Assets allows data and planning to be com- (www.blackinkassets.com), a busipleted so decisions can be made in ness consulting and management a timely manner. In addition, many company providing organizational entrepreneurs turned business own- assessment and efficiency perforers are reluctant to add management mance services, business growth capacity that brings a higher level of and sustainability guidance, inforexpertise beyond the owner’s capa- mation technology services, and debility. In many instances, entrepre- velopment of corporate transition neurs are scared to death of and owner exit strategies. someone who brings an expertise to
In a recent article written by Toddi Gutner entitled, How to Know When You’re Losing Control, business owners, at a certain point in time, inevitably come to the realization their business is no longer in their control. Could it be the business owner isn’t driving the business as hard as he/she used to, or maybe you’ve lost the ability to motivate your staff? Maybe you have achieved the ‘peter principle’, that is, you have exercised all the talent you have to bring the business to this point but you no longer have the skill-set to take the business further down the road to success. There is no question entrepreneurs are visionary risk-takers. They have the sheer talent to take an idea, put it to paper, then form, structure and build the business. This talent is genius because very few people in the world have both the talent and perseverance to accomplish this mammoth goal. As I have repeatedly argued, entrepreneurs are the engine of growth for our economy. As small business goes, so goes the economy. Small business fuels job growth, market expansion, and technology innova-
The question many entrepreneurs need to ask themselves periodically is this: What are the warning signs that tell a small-business leader he or she is losing control? During the startup phase, the entrepreneur is involved in everything from creating the product or service, to marketing and business development, to hiring employees and making payroll. In the early phases of company development you need this type of focus and drive. A common vision and a steady pulse are keys for survival. However, if the entrepreneur does not remove himself as the bottleneck the business begins to suffer because efficiency grinds to a halt when decisions are not made when necessary, and the staff becomes paralyzed with indecision. As a result, the business owner begins to won-
To avoid such a scenario, business owners need to address the following issues and watch for applicable warning signs:
Finance and inventory levels. Given the current state of the economy, it has become increasingly difficult for small businesses to push forward into a significant growth phase because of a lack of available capital. It is no secret the three most important aspects to a successful business are cashflow, cashflow, cashflow. Too many business owners do not take the time to secure needed capital for growth. But that’s not all. Overordering inventory, increased levels of out-of-stock inventory, antiquated computer hardware and software, and poor invoicing and customer service are all examples of a situation where the business has outgrown its system.