This is the final post in the three-part series:
‘Emotional Venting in a Stuck Company’
This final episode explains emotional venting related to internal confusion over the company’s OPERATIONS. When I stick my head under the hood of a company and listen, I often hear lots of clanking, banging and rustling from the CEO, Board, and investors about:
- the overall business model
- cash (or the lack thereof)
- the capital structure (translation – too much debt, not enough equity)
- costs: fixed and variable
- business processes, weak systems, old equipment
- the basic forces of producing and executing
Recap of Episodes 1 &2: Episode 1 pointed out the emotional ebbs and flows associated with LEADERSHIP in a stuck company. Their voices express what they live everyday.
Episode 2 gazed outward at the emotional toll inflicted on the business by a host of ever changing dynamics broadly called EXTERNAL FORCES. What’s happening to us?! Can a company be a victim? Maybe so, but maybe not…
Listen to what people have said when OPERATIONS are contributing to underperformance…here’s a peek at my notes from initial client meetings:
Fog means: “The business model is convoluted and muddled.”
The business model topic is a ‘tweener’. I could have included it in Episode 2: External Forces because a comprehensive discussion about a business model is centered on a company’s products/services and the overall value proposition to its customers. However, despite the fact that some of the emotional frustration from a muddled business model has external connections, a lot of the angst is internally linked to financial and operational conditions.
For example, this is a typical scenario I have encountered:
- An unfocused business model creates unnecessary complexity throughout the company.
- The complexity creates a high cost structure that erodes profitability and shareholder value.
- When this happens, owners tend to conserve cash and not invest in regular maintenance, needed capital expenditures and better systems.
- Innovation? It’s not happening.
- The vicious cycle of decline has begun.
- Moral of the story –> fix your business model.
Maze means: “Our financials don’t tell a very good story.”
Rough means: “The organization has high blood pressure.”
What can companies do when confronted by operational challenges?
If you would like to dive deeper into an analysis of how a stuck company responded to their own set of OPERATIONAL CHALLENGES, read the Boot Camp series on the home page of this blog site.