Dave Edenfield is a partner of Visions Group LLC, a solutions group providing marketing, management and production assistance to the green industry. He can be reached at firstname.lastname@example.org.
INSIDE THE BOX -- Plans for 2013
By the time you see this article, Fall 2012 will be in full swing — hopefully a little cooler weather, more normal rainfall, football games and strong autumn sales for both growers and retailers.
Fall is also a great time to step back and take a look at the 2012 season and see where you want to take your business in 2013. As we think about our business and our industry, we start to naturally think about what will be the challenges that we will face in 2013.
What Lies Ahead?
There are several challenges that we know will affect business next year including weather, unemployment, unpredictable fuel and transportation cost and an upcoming election full of surprises, just to name just a few. So as an owner, leader and director how will you manage the uncertainty of what next year will hold for your business?
Generally, companies can make strategic choices once they know the changes that will affect them. Will laws change? Will taxes go up or down in 2013? Will it rain the entire month of May? How will the new farm bill affect our company?
Waiting to make a decision that will provide direction can be simply paralyzing for an organization. We find that employees and customers are very adaptive once they know what the situation (problem) is and have some idea of possible solutions or outcomes. They may not like the outcome but are certainly more willing to accept. Uncertainty leaves everyone uncomfortable.
Deal With It
I recently read some thoughts for managing uncertainty that I found to be helpful and thought provoking.
1. Provide certainty within the thought process.
While we may not be able to tell our employees what the outcome of a decision will be, we can provide clarity about when information will be provided. Setting very clear communication dates can reduce the some of the questions surrounding uncertainty. Communication to your staff is extremely important. While you may not have all the answers, share what you can as soon as you can. Questions and solutions may not be fully resolved, but partial information will help with uncertainty.
2. Tackle maintenance and repair.
Uncertain times provide a good opportunity for fix ups and cleanups around the greenhouse or nursery. Sometimes uncertainty about the future makes it tempting to let cleanup and projects go undone. But doing repairs or general maintenance that can improve the operation, represents productive action and relives stress that is caused by uncertainty.
3. Let all ideas flow.
Opening the brainstorming faucet with as many employees as possible can help wash away some of the uncertainty of the future. Uncertain times lead to rampant gossip and speculation. Why not harness some of employees’ imagination toward a productive end. The majority of your staff will enjoy brainstorming about possible situations and stimulates the imagination. You might be interested to hear what’s on their minds.
4. Show true appreciation for key customers and suppliers.
Showing that you value your customers and suppliers can be very important in times of business uncertainty. Thanking customers for their loyalty or appreciating suppliers for their contributions doesn’t involve making promises, but does involve making friends. Sometimes those gestures bear fruit in the revenue stream, when good customers or suppliers decide to reciprocate by increasing their purchases or sharing their best ideas with you and your company.
5. Remember your purposes and values.
By emphasizing who we are and what we stand for reminds us of the long term. It will help our organizations to focus on the times ahead instead of today’s challenges and uncertainty.
The actions that we take today will influence what happens tomorrow. I like to think that uncertainty will ultimately lead us to opportunities.
It is not possible to predict with any sort of certainty the various challenges we may face in 2013. But we can be as prepare as possible by keeping the following in mind:
1. Identify and set priorities. Make a list of all the risks that might affect your business next year. Solicit input from as many different people as possible — your lawyer, an accountant, office manager, head grower, sales staff, etc. A risk evaluation is likely to uncover dozens of potential risks.
Next make an estimate of the negative impact of each risk and try to express in dollars. Then assign a probability to the risk and express it as a percentage. Calculate the expected value by multiplying the monetary impact by the probability. For example, if cuttings of a particular variety scheduled for an ad were delayed in arriving for production would cost $50,000, then missing shipments of finished product by two weeks had a 50 percent probability of occurring the value of the risk would be $25,000.
Finally, rank your risks list by expected value.
2. Take all possible actions to avoid or minimize the risks. In our previous example you might consider diversifying your risk by splitting the order between two different suppliers.
3. Develop possible contingency plans. Some risks simply cannot be avoided, but others can certainly be reduced. You need to have contingency plans for all major risks. By preparing a course of action in advance you don’t lose time when challenges occur. Instead you are able to respond quickly and effectively.
What makes good companies great companies is leaders who communicate, challenge everyone to improve and become truly engaged in the business, Invest in relationships — employees, customers, and suppliers, and remain faithful to their business principles. Uncertainty is certainly part of the process but how we manage it is the first step to a successful 2013.
Dave Edenfield is president of Visions Group LLC, a solutions group providing marketing, management and production assistance to the green industry. He can be reached at email@example.com.