Do the right thing Featured

12:16pm EDT September 27, 2002
Someone recently said that the last seven words of the human race will be, "We've always done it this way before."

In a company, they may not be the last words, but once that thinking becomes part of the culture, it can mean big trouble. It may indicate the company has gotten stale and that it is no longer serving its customers' needs.

When was the last time you took a hard look at what your company really does and how it does it? If you haven't, you should be asking yourself, "Are we doing the right things, or are we simply doing things right?"

Companies spend years developing and improving products and services. After making or doing something that long, their efficiencies and quality get better, so why aren't they always selling more of this thing they do so well? Perhaps it's because the thing they do so well is the wrong thing.

It may have been the right thing at one time, but as they honed their skills, it became the wrong thing. Newer products and services hit the market. Or customers' tastes and needs changed. Whatever the reason, no matter how well they do something, if it's not what the customer wants or needs today, it's the wrong thing.

Sometimes companies get so good at doing certain things that they start doing more of those same types of things. The new services are well received. Demand for the older services decreases, but they are still offered.

The organization now has both newer, stronger and older weaker services. It becomes like a tree that has so many branches they stunt its growth. Limited nutrition must be spread to every branch. Instead of a more compact, but strong, healthy tree, it is large but weak. It may be time to trim the tree.

Trimming is not always easy. Companies have spent years cultivating their products, services or locations and grown attached to them as they nurtured them. The belief has always been that bigger is better. Pruning requires a change in mindset to accept the need to cut back in order to improve the company's strength and health.

I once worked with a retail chain that was adding stores every year. There were, however, underperforming stores. Some were the oldest locations with the greatest sentimental value. They just no longer met customers' needs and changing shopping habits.

It was difficult convincing the owners that their resources could be better utilized in their better performing stores. These older stores ran very well, and their staffs did a great job of serving customers, but there were just not enough customers.

It was a case of doing something right but not doing the right thing. The evaluation and pruning process made the company temporarily smaller but much stronger.

Doing things well and continuously improving processes and operations is crucial to continued success. But so is examining what it is the company is doing so well and then having the courage to prune branches before they weaken the entire tree. Joel Strom (jstrom@jsagrowth.com) is director of Joel Strom Associates LLC, the growth management practice of C&P Advisors LLC. The firm works exclusively with closely held businesses and their ownership, helping them set and achieve growth objectives while maximizing their profitability and value. Contact him at (216) 831-2663.