We are about to finish the year 2019 and it would be absurd to deny that it has been extremely complex, from my point of view it has been since the earthquake of September 19, 2017: my numbers were climbing in an extraordinary way but since the earthquake something happened or, rather, everything has passed.
As an example, the Trump-AMLO combination; many at the time predicted it and I myself thought it was extremely unlikely, however that is today one of the most turbulent factors, but those are the facts. But, before that, what can we do in companies? Let ourselves be infected by the virus that “everything is slow”? Wait for things to work out? not invest? It seems to me that our obligation is to evolve in an ambidextrous way, to have the ability to exploit the strengths of our companies while continuing to explore business opportunities that may arise in the future.
Thus, in the month of December, most of the companies that are used to planning their next year will have their strategic planning for 2020 on their desks and with it, the prediction of their financial, commercial, process management, and asset management results. people and information technology, then how to plan an ambidextrous company? In good times who designs the best prediction is marketing, but in times of uncertainty who has in their hands the best prediction is finance and this is where I suggest something different:
- Manage your company like a toothpaste with little paste, sounds strange right? I mean making an analogy of when one has a toothpaste with little paste and one is using only what is necessary to manage its content, very different when the paste is complete and generally one uses more than necessary, perhaps even wasting, then, imagine your finances as a toothpaste with little content and order your administration in the following way: from your sales, separate the operating income into another account, then separate your taxes, then separate your suppliers and leave your expenses at the end, strange? ? what it will cause is that you and your team sit down to review all the expenses of the company and question whether they are productive, in the first instance you would tell me that they are, that all the expenses are justified and that it makes no sense to review with a magnifying glass each of its items, however, as I told you, the first operating principle is to improve the execution and continuous improvement of business processes or their current capabilities, then force oneself to work with a paste with little product, that is, optimization of capital of work.
- In the design of initiatives, try to give priority to those that generate cash flow, perhaps the profitability is affected in some of them, so the best selection is , initiatives that being profitable do not “bleed” your cash flow, be careful but invite your consumers to promotions, discounts, repurchase mechanisms; always looking to generate flow.
- In difficult times the one who wins is the one who has the product, your inventories will play an extremely important role, your negotiations with suppliers, the management of your 80/20 and the possibility that your consumer always has the product when he arrives at your point of sale. Be careful, if your competitor fails in this matter, it will be a very powerful lever in your sales, so think 80/20 and analyze that the 20% of your products that generate 80% of your income, those religiously have them and the others do not. they will be necessary, don’t worry.
- Prioritize the short term over the medium term, that is, work with your installed base and your most powerful clients. There is also an imbalance here, there is also an 80/20 relationship with your clients; analyze the 20% of your clients that generate 80% of your income, sit down with them and pamper them: in these times you cannot afford to lose just one of that group, the others are not that they are not important, but they are for the medium term.
- And finally, as a friend says, “I started making money in my company when I started sharing it with others” and you know, you’re right. You have to share, try to take care of your support network, your suppliers; we all need money to circulate and that is how we ourselves in companies will make the economy move.
- The principle of exploration is to seek business through new business models, so go digital! Start working O2O, that is, if you are in the Off Line world, start exploring the On Line world, work on your social networks, review your website, create information blogs, work on digital advertising (much cheaper and more profitable than the traditional one by the way), that is, start to set foot in the digitization of your company.
- Look for new clients who know your value proposition, look for them on your digital platforms! Review your business processes, start structuring your traditional process in a digital context and map your sales process in a CRM, (by the way there are many, very good and free ones on the net), get the business area out of the chair and go out to improve your conversion rate: new customers with my 80/20 products, safe money!
- Go to China, it may sound trite but it is time to think about getting suppliers in the last link of the productive chain ; factories that can develop your products (let’s say the first 3 of your 80/20 list) and that with a portfolio of own brands you can begin to improve your value proposition to your consumer who already knows you. Personally, I don’t like to buy the virus that people just repeat “the economy is slow, things are difficult, etc.” I feel better with my team and I start working hard on initiatives that allow me to help my company continue to grow, function efficiently and generate operating income. In the end, we have to be more and more ambidextrous, I don’t know what will happen in 2020 but my prediction is that we will grow above inflation.