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August 23, 2013

Assessment Comes First, Then Decide How To Fix It.

Every Business Has Its Own Nature To Respect
This message is offered as an example of how not to jump in and go fix a broken business model without first getting all of the useful information you need.  I will use a firefighting example.  I want to make it clear that in no way do I disrespect those who put their lives at risk every time they go to work.  Military services, public safety and several other professions involve great risks for losing a life.  We owe these men and women a serious debt of gratitude for the dangers they face in the work they do.  It is well above the call of duty.  I, in no way, would ever disrespect the kind of work they do.

That being said, I watched a small lighting fire get out of hand in a small community recently.  At first what seemed to be a small manageable fire quickly grew out of control and turned itself into something very dangerous.  It has not yet taken a human life but has destroyed homes, property and natures friendly ways where the fire damage has occurred.  It is still burning out of control.

One the third day of fire fighting, the local crews recognized the need to solicit more help.  The State dedicated the funds and the phone calls were made.  In short order hundreds of fire fighting crews from nearby regions headed to help fight this terrible fire.  The State sent in its State Fire Marshall's to oversee the early arrangements of the organizational post.  Several other leaders in the fire fighting community convened on the base to develop a game plan.  The next morning we witnessed hundreds of fire trucks, loggers, tractors, large bulldozers, fire trucks, tankers, helicopters and spotter planes moving about to go do their job to arrest this fire.  The winds were huge.  Fueling the flames was a 30 knot set of gusty winds moving the fire deeper into the upper hills and dry lands.  Some structures would be at risk with these fast moving flames.

The fire crews had their orders.  The game plan was put in place.  The maps, the satellite images, the radios, the computers and the technology was all fired up.  These leaders headed to that ragging fire with a very organized bunch of well-trained firefighters.  The day of attack was now in place.  The plan was full steam ahead.

By the end of the day, some progress had been made.  The winds won the day but the firefighters were able to get all of their heavy equipment placed well ahead of the fires path and begin breaking a large swath in the rugged hills for the fire lines they were making.  The plan looked good.  Their solutions were working.

Then came the next morning.  Miles above this hilly region is a great snow-capped mountain.  This mountain produces some very cool breezes that each morning draw down into the valleys until it reaches the large river at the bottom of all of the draws.  This nasty fire happens to be placed somewhere in the middle portion of one of those draws.  The heavy 30 knot winds of yesterday were being forced by nature to travel up to the mountain in those draws.  That caused the fire to move uphill, quickly.  This is exactly how the 'newcomers' in the area expected those winds to move.  They were correct with those assumptions yesterday.  That is why they had placed and arranged to move all of their heavy equipment up the rugged hills ahead of the fire.  They wanted to get well ahead of the fast moving flames and make a huge fire line to remove the material the fire could consume.  This way they could lower the intensity of the fire and put it out.  It would burn itself out.

However, first thing in the morning the winds shifted.  The cool air moved down the hill in completely the opposite direction where all of the fire fighting equipment was located.  The leaders of the fire crews got caught off guard.  They did not know about these unique pressures the sea, river, mountain and gorge designed regions produce.  Each morning the winds go the other direction until about 9 A.M. when they finally shift around as the land mass heats up for the day.  The cooler mornings produce moderate winds going downhill and northward.  This is exactly the opposite direction they were planned to protect.

Let's evaluate this scenario.  Page two.

Every Business Has Its Own Nature To Respect
In a broken business model there are many unwanted fires that need to be put out.  Most of those fires are obvious.  For example, a supplier is refusing to ship pre-sold products to the retailer until the products are paid for up front.  The retail business does not have the cash flow to fund 'up front' buying.  So the pre-sold products are being withheld from the customer who actually bought them.  The customer does not want to pay for something they have not received.  The retail business finds this awkward arrangement unmanageable to process.  Everyone will lose.  The fires in small business are easy to see.  Fixing them is the hard part.

The owner hires someone to come in and help them re-direct their business affairs.  They want to repair what is burning out of control.  The first thing the repair specialist sees to do is to find cash to pre-pay for the held up goods.  Off they go running to fight this business fire.

Things are not always as they seem, however.  How many of you have heard this phrase?  Well, it is certainly a true and accurate phrase to respect.  Let's go back to the fire fighters.

Those leaders pulled their services, their experiences and their knowledge together to come up with a plan to arrest that ragging fire.  The one thing they forgot to do was to run their plan by someone local who knew the area and how it uniquely behaves.  Had they run that plan of attack by the orchardist in the area, those who make a solid living on the movement of the winds and temperature changes in the hillside draws of that area, they might have learned some important things about how the morning airs shift around.  Had they had that information when they made their plan they would have been prepared to protect what the fire decided to do next.  You guessed it.  The fire turned around and went the other way.  As it moved down the draw it found new material and headed a bit west which was uphill to a collection of many homes.  The fire fighting now turned into a serious issue.

Sometimes it is best to lay low for a brief moment, before any solutions are placed in action, and collect some inside information about how the business land lays.  The local employees have a lot they can offer even if their business model is operating on fire.  Repair specialists can learn a lot of very useful things from the people who live inside the failing business model.  Ask around, test the winds, collect the information that produced the fire and how it burns.  Before any game plan can effectively work make sure all of the right data is being observed.

If you are headed to repair a small business model that is failing to produce what it needs to produce, gather more stuff from the ones who are living inside.  As little as their information might seem, it can provide just enough useful stuff that can help make the corrections less damaging to employ.  Leaders often forget this simple rule.  Go ask the locals how the winds behave in the early morning hours.  It may save more homes that did not need to perish in a fire that got simply tricked to move out of control by the unique characteristics this region holds.  Every business model behaves exactly the way it uniquely behaves.  Before you place any cloth on that business body of repair find out how that business behaves, first.  The damage done will likely become less.

Until next time...

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