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Management Information |
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Lets Flourish and Prosper!
Some say that in business as in sex: if it is good, it's great and if it is bad it's still pretty good. This does not happen to be true. If business is bad, it can get very bad. There are personnel problems, production expenses, overhead, laws, taxes, fines. Faulty financial decisions, inability to accurately evaluate the situation and quickly resolve problems all lead to an extremely high mortality rate among new business: up to 95% do not survive past their first 12 months. Modern business management is an art, based on a certain technology requiring certain skills. There is a technology of how to estimate and evaluate any situation and accurately predict future events and trends. There is a technology of finding exact problems, the underlying reasons behind them and handling those exact reasons to eliminate specific problems. Some of the basics of this technology are presented here to help anyone flourish and prosper. 1. OPERATE BY STATISTICS. Statistics reflect production of something in a unit of time. It is a tool that should be used to locate and handle any routine problem or any severe crisis. Awareness of the key statistics provides you with an insight into what is really going on in your business. They help establish causes of events. Best businesses collect up all their key statistics daily, sometimes hourly. Examples of key statistics could be Gross Income, Value of services Delivered, Number of Contacts Made, Number of Appointments Made, Number of Closes, Cash/Bills Ratio, Minutes of Operation With No Downtime, Qualified Staff Hired, Dollar Return Value per Promo Ad, etc. Anything can be represented as a statistic. 2. CONDITIONS. Everything that exists, any activity, is always in some condition. These conditions are very well defined, there are only 6 of them. Depending on statistics, every activity is in one of these 6 possible conditions. Any activity starts in the condition of Non-Existence. As it becomes better established and more known, it raises up to Danger. Then, as it expands, it passes through the condition of Emergency into Normal Operation and then may reach Affluence or even Power. So the conditions from the bottom up are: Non-Existence, Danger, Emergency, Normal, Affluence and Power. Each of these conditions has a "formula", a series of steps which would lead the activity out of any condition it is in and move it into a higher condition. + For example, formula for the condition of Non-Existence is: · Find a communication line - a channel on which communication can be sent out and received. · Make yourself known. · Discover what is needed and wanted. · Do, produce and/or present it. This is the starting condition for any activity. It is easy to see that any gross non-compliance with any of these 4 steps would make it impossible for any activity to eventually reach Affluence. People either know these conditions and use the formulas or follow conditions intuitively, or completely neglect them, commit gross errors and fail. Statistically, these 6 conditions look as follows: - Non-Existence: statistics are crushed to the bottom or stay extremely low for a long time or it is a brand new activity. - Danger: statistics drop sharply or there is a gradual drop over a long period of time. - Emergency: statistics are slightly down or remain unchanged (no rise, no fall). - Normal Operation: gradual increase in statistics. - Affluence: significant increase in statistics, very steep uptrend. - Power: after a period of Affluence statistics go into Normal Operation trend (gradual rise) on a brand new very high level. 3. DATA ANALYSIS/SITUATION ANALYSIS. Accurate analysis of a situation is a science in itself. It is based on the subject called Logic. It is not feasible to get into it at any length here but there are 2 points that must be understood: 1. There is a cause for every non-optimal situation in business. That cause is defined as something under your control which if handled will resolve the exact problem and revert the statistics. 2. To handle any situation you have to handle the exact reason that created it, not something else. This seems obvious but people often do the opposite. For example, an employee keeps breaking tools, the owner keeps buying better and sturdier tools. What problem is he trying to solve and what was the cause of that problem in his opinion? The actual reason was that the employee was untrained and needed drilling and apprenticeship. It just required a little bit of an investigation and observation to figure out. Operating by statistics, knowing and applying condition formulas and investigating the causes of problems allows any activity to flourish and prosper. I will be happy to answer any questions. Let's flourish and prosper! Michael Priv
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