You Want Change – But Just Can’t Do It
I just finished a four month consulting gig with a small firm (15 employees about $1M in revenue) who asked me to help them grow and grow aggressively. So like every engagement I started out assessing what they have, how they do business and what were there assets that could be leveraged for aggressive growth. Oh yeah, they were a software development company. Here is what I found:
- They didn't have any type of plan.
- They didn't have specific goals or objectives.
- They no had project management system (critical in software development)
- They were going to have a negative cash flow of $60K for the first 2 months of the year, and they didn't know it.
- They did not leverage their client base for new business.
- They were averaging about 60% turnover annually.
- They had no defined target market. (They chased whatever moved)
I could go on but that is enough…
When I came back to them with some suggested changes I thought they should make in basic systems and processes all I received was defensiveness. Of course it is normal to defend the status quo, it is part of the change process.
Ultimately I ended up stopping the engagement because of what I call 'horse to water' reasons. I could justify a change, build the perfect case and rationale but I was not going to get the change executed with the owners. They had survived for years doing it the way it was and simply would not change.
I guess my point is we all need to be aware of our own barriers to change both in business and our personal lives, but we don't need to have a 'near death' experience to lower those barriers.
How open are you to change?
This is my first post since joining bizinformer, be gentle with me.
Management | admin | 08 May 2006 |
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By John McDougall, May 8, 2006 @ 3:04 pm
Initially, I say “kudos” for having the integrity to walk away from an engagement once you saw it going nowhere… but after a little reflection (and a lot of assumption) I say – CHICKEN!!!
If I read you right, these people are like any small entrepreneurial firm looking to grow. You describe people that are probably not adept in business planning systems, probably don’t have any formal P&L training and live hand to mouth.
My guess is that your recommendations included a capital investment in systems and infrastructure that would take time to roll out. I am also assuming that once it was installed and running you would have to “test” several primary initiatives to determine the optimal path. And all of this would have to take place without any kind of forecast much less guarantees that there would be an increase in revenue during implementation and shortly after.
This company was and is simply too small to implement the changes you recommend, no matter how right your may have been.
If I am wrong in my assumption, I apologize and retract everything after “going nowhere”.
Welcome to bizinformer and good luck!
By Steve Rucinski, May 8, 2006 @ 3:35 pm
Thanks for the comment John! No I was not recommending any ‘capital’ expenditures I knew there was no investment capital. My recommendations were mostly process changes, sales, development and management.
By John McDougall, May 8, 2006 @ 4:22 pm
“KUDOS!!!”