How adaptable to change is your business during these challenging times? Are you able to respond with flexibility or are you so rigid that you feel you can’t move?
When reviewing organisations, project or business models one of the the keys to seeing whether they are sustainable is to see how rigid they are. Without flexibility, businesses won’t survive long term. Things are changing so fast in areas such as technology, globalisation, outsourcing and within industries that you have to have flexibility to deal with change.
Some of the key areas that you need to have flex in your business includes the following:
- Don’t have a workforce that is full time employees. You need to have a mix of casuals, contractors, outsourced arrangements, virtual assistants and other workforce that do not lead to high fixed costs and a lack of flexibility;
- Have different mechanisms to generate income. Income from employees is one measure to generate profits. It is not sustainable. You need other income streams including margins from subcontractors, other joint ventures, plant and equipment or other cost recoveries, joint ventures and other initiatives;
- Further to point two, this also extends to selling value rather than time or materials. Selling time to drive volume is a great strategy during good times but when things dry up, the time might not be there;
- Don’t have too much of your work coming from one industry or one client. It might be great in the short term but as good as the revenue is, the challenges this presents is that it will dry up at some stage either due to the industry slowing down or a client going through challenging times;
- Look to capitalise on outsourcing arrangements that are low pay off activities and others can do better at lower cost or at a higher standard. There are many opportunities to do this including offshoring or through contractor arrangements;
- Enable your staff to challenge them self to focus on high payoff activities rather than being busy and not productive. Being busy rather than productive is a form of laziness. Challenge all staff to focus on adding value rather than going through the motions;
- Capitalise on technology and other changes that are now available for every organisation given the significant advancements in these areas including portable technology for outside staff; and
- Look to streamline every area of your business through lean thinking, removing bureaucracy, and processes that don’t add value.
Get objective people in to review key areas of your business. Asking the tough questions and opening yourself up for challenge is hard but needed. You are not helping people in your business from protecting them from change in the hope it goes away. The tsunami is coming.
One of my favourite sayings is “nothing fails like success”. I see a lot of businesses that are successful now but will not be in the future. The simple reason is they are built from steel and not bamboo. This will break at some stage due to not being adaptable, flexible or coachable to change. Make sure your business is flexing now to realise the benefits long term.