With all the daily tasks that go into running a business, it is easy to lose sight of things that should be done to make a company better in the future. Yet every so often, a company needs to take some time to identify the factors most important to its longevity. Doing so will enable a company to focus its effort in a way that will turn opportunities into results.
Factors of importance will vary from company to company. Those experiencing rapid growth will likely realize the importance of managing growth in a way that is both profitable and sustainable. Companies in highly competitive industries may discover that a number of things are equally important, such as cost containment, creative pricing schemes and product differentiation initiatives. Companies in relatively mature industries might find that new product development is the most critical factor to future success (or survival).
The following questions will help determine what is important to the future of your business:
• Are your customers delighted with the quality and performance of your products? Even though everyone understands the importance of producing and shipping quality products, an honest answer to this question can be disappointing. Despite procedures that strive to control product quality, there may be times when defective parts end up in the hands of customers. If you think quality is not at the level it should be, then your most important task is to fix this issue as soon as possible.
• Do you understand your customers’ expectations regarding service levels? Meeting a customer’s service levels, especially with regard to lead time and on-time delivery, should be of paramount concern to any company. It may be that service requirements vary from customer to customer. Be sure you understand the needs of each customer, and take whatever steps are necessary to regularly meet those needs. Perhaps today more than ever, if you don’t satisfy your customers, somebody else will.
• Are your employees effective and capable? Another way to phrase this question is, “Do you have the right employees in the right positions?” Effective and capable employees make a company better, but they may need to be motivated to do so. To this end, a structured means of evaluating employee performance and communicating that evaluation to each individual is important. Periodic reviews of employee knowledge, skill and ability will reveal an organization’s ability to meet future challenges.
• Are you experiencing high employee turnover? If you think that employees are your most important asset, then a high rate of employee turnover is cause for concern. Many things can contribute to employees leaving a company—certainly the job market is a primary driver. Yet, there also may be some structural issues within the company that can cause turnover. Employees forced to work long hours on a recurring basis to keep up with a large workload can experience reduced motivation that can lead to burnout. In addition to the disruption that comes with a high turnover rate, it can be costly to find and hire a new employee. Therefore, finding ways to mitigate high turnover can positively impact the bottom line.
• Are your process capabilities sufficient? Flexibility is the key for today’s manufacturers. Changing over from one job to another as quickly as possible keeps machines running and product moving. Although no company can have an unlimited budget for equipment upgrades, it is important to identify priorities that take full advantage of available funds. Even though new equipment must provide a reasonable payback, keeping old machines too long may put you in a position in which it is difficult to compete. The importance of process capabilities that meet the needs of your business cannot be overstated.
• Are you getting materials and supplies at the best delivered price? This is another factor that can have huge financial importance to a company. Of course the “best price” is not always the lowest price. Price itself, along with quality and service, are all partners in the best price equation. There may be times when the difference between winning and losing a job depends on how effectively you can acquire the necessary components and supplies. Innovation is required in this endeavor, as is the need for strong relationships with key suppliers.
• Do you know your strengths and recognize your weaknesses? This may be a pretty basic question for any company, but it’s one that needs to be asked. A company’s strengths are usually easier to recognize, but recognizing your weaknesses may be more important because they represent the most immediate opportunities for improvement. Conducting a periodic self-assessment can be revealing to those willing to open their eyes.