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June 26, 2011

HEATHER PENNEY: Is it time for your business to be more flexible?

TERRE HAUTE — Economic indicators say that the economy is on an upswing, but has your business seen any improvement yet? Do you think your business should be more flexible? The best person to know your business is you. Have you recently analyzed your company to determine potential areas of weakness? To use a gym metaphor, maybe some aspects of your business are flabby and need toning!

Although you may not change your key company aspects monthly, they still need to be evaluated and tweaked on a regular basis and typically this is in conjunction with the company’s business cycle.

As you review your company’s history and also the direction in which you would like your company to go, you may find it difficult to see how to make your company more flexible. This is where I would recommend researching similar companies as yours and how they embrace flexibility. Also consider looking at completely different companies as well.

Often you may learn of new and innovative practices that will not only make your company flexible but will also provide it a bit of a competitive advantage.

For example, companies will often have the following objectives:

• Improve EBITDA by 20 percent over the next two years;

• Achieve compounded double-digit revenue growth each year for the next five years;

• Introduce 5 new products to the market next year.

In addition, they also go back to the basics …

• Reaffirm and recommit to the purpose: Assure that the organization’s purpose — including mission and vision — is absolutely clear. Obtain commitment to the purpose at all levels and develop objectives that support its achievement;

• Clarify and commit to the values: Define the company’s DNA and assure that the hiring process includes some type of assessment to assure candidates possess the desired values.

It is important to understand that, regardless of how successful an individual appears to be performing — if he or she does not follow the same values as the rest of the organization, damage will occur;

• Align focus on the customer: In relation to the purpose, assure that everything the organization does is focused on the customer. As Gene Perkins, retired Group Vice President-Flow Products at Emerson Electric Company once said to his management team, “if we’re not thinking about the customer first in everything we do, we might as well fold up our tents and go home;”

• Increase understanding of the system: Especially at the management level, people must understand the company’s overall system (i.e., how the company serves the customer) and work to continually improve how materials and information flow through the system. Managers must be company-focused rather than functionally-focused;”

• Align measures and rewards with direction: Once the direction and focus has been established, make absolutely sure that there is close alignment between them and the reward systems in the organization. Be continually on the lookout for rewards that may encourage undesirable behavior. (Courtesy of corporatedeathspiral.

You might be asking, “What can all this do for me? Why should I do it?” Well, the answer is two fold. First, you will find that voluntary turnover in the workplace will decrease. More than 90 percent of all employers have some time of workplace flexibility set up. It has a stronger impact on employees’ motivation, job satisfaction, and engagement.

In addition, it also builds a stronger core culture in the workplace. And second, flexibility in the company inspires commitment from your customers and will potentially drive you further in the market to obtain more of the share.

Heather Penney is the regional director for Indiana State University’s Indiana Small Business Development Center.

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