Action, Not Reaction: A Solutions Approach to a Company's Problems

Action, Not Reaction: A Solutions
Approach to a Company's Problems
By Curt McCaskill

In today's business environment, companies find themselves constantly bombarded with challenges. Company leaders must make decisions daily that impact the very existence of their organization. What do you do when things do not work out? The most common human trait at this juncture is to react: fix it. The better approach is to arrive at a solution.

First Step: Back to Strategy

The first step is to understand how this event impacts your overall strategy. Most companies have some idea of what and where they want to be. If your organization has a formal strategic plan, plugging this event into that document and looking at the impact on the various success factors is critical. If a formal plan does not exist, a focused meeting on strategy is imperative. In either case the company must determine if a) the problem is material and b) if a change in overall company strategy is required.

Second Step: Know Your Limitations

Once the company is comfortable on what needs to be done to keep on track with its strategy, the organization needs to lay out a detailed plan. In this plan, the company must be honest with itself on what it can do alone and what expertise it must bring in. This is not the time for "on the job training." The company must know how it will pay for implementing this plan. Do you have adequate capital to cover these costs? Will additional resources be required? How are you going to secure adequate financing? Where do you go to get it? The goal here is to know what you have, what you do not have and how you will get what you need.

Third Step: Focus on the Solution

With the plan in place, execution is critical. This is where most companies fail. The tendency at this point is to get operations or product oriented. Securing a loan, raising equity, upgrading the information system, hiring staff and downsizing the operation are not solutions but rather steps in a plan. Realize that not all steps will be positive. Choices and sacrifices will have to be made to achieve the higher goal.

Fourth Step: Measure and Validate

How do you know you have rectified the issue? Executing the plan is not enough. The company needs to measure the impact of this plan and validate these measures to the overall goal. What appears to be resolved may just be hiding under the surface. Monitoring is critical to ensure that that which was implemented is delivering as intended.

While no company likes to plan for the negative, it needs to be honest with itself that bad things do and will happen. The successful company will be one that understands this and develops a philosophy of action rather than reaction.

Curt McCaskill was the director of Ostrander Burch and Company's Interim Financial Management Division which provides financial and management consulting services to emerging entrepreneurial companies.

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