I'm adding Gary Sutton's Corporate Canaries to my list of top business books (the rest are towards the bottom of the page over here).
It's been a wholesome experience taking time out of my normal reading about how to do new things, better things and growing the business, and think instead about defence, and avoiding the ways in which you can come unstuck. This book (which is a seriously quick read) boils this concept down to five ideas:
- You can't outgrow losses (if your turnover is increasing but your profits are not doing so proportionally, then you've got issues).
- Debt's a killer (yes, borrowing money can kick start your growth, but when the bad times hit you'll struggle to meet the repayments).
- Only fools fly blind (do you measure and track exactly which of your products/projects/customers makes you money, and which are killing you?).
- Any decision beats no decision (just get out there and make something, anything happen instead of just sitting around talking).
- Markets grow and markets die (the scariest of them all, since no business guru can rescue you if your market disappears. Be prepared to drastically change course).
For me, the 'only fools fly blind' concept really rang true for my business. As a professional services company, our product is the time of our team members, but up until about a year or so ago, we weren't measuring how long we were spending on projects. It was madness, since we carefully quoted for work based on how long it should take, but once the client signed up the work just took as long as it took. We would get to the end of a project and have this vague dissatisfaction that we spent much longer on the work than we quoted for, but there was no way to drill down and find out exactly what happened.
It has taken a full year to get the systems as well as cultural changes into place to properly track our business operations, but we're a stronger company for it. We now know which of our projects (and clients) are making us a profit and which are in the red.
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