If you can’t make great decisions in your organisation, there’s not much point in getting out of bed. The quality of your decisions is dependent on the quality of your decision makers and their understanding of the whole of the organisation. Hence, investing properly in training them and hiring your team is essential. There’s no such thing as a ‘cheap deal’ when it comes to people.
Over many years of providing advice to scaling organisations, much of my time has been explaining to teams the importance of understanding the whole of a company rather than just the department they work in. This allows better decisions to be made without the unintended consequences of other departments being impacted adversely and also drives better productivity. So I thought I would explain how I do this. Feel free to share it around with your organisation and others. I hope it helps…
The Players
Let’s look at how organisations work (even public sector — just the nomenclature is slightly different). There are 5 key players in every organisation:
- Marketing — These are the folk that are responsible for generating leads. Another way of looking at it is that this team brings the horses to water.
- Sales — This team is responsible for taking a lead and turning it into business. Or: Getting the horses to drink.
- Delivery / Production — Pretty straightforward — this team makes or delivers the products / services.
- Finance — At the end of the process, someone creates an invoice and sends it to a customer.
- Management — These guys are responsible for making the whole system flow smoothly.
Of course there are other elements to it, and in different industries the names might change a bit. We mustn’t forget about HR, IT and other functions but they service the flow above.
The Gate of Acceptance
So you can see in the diagram above there’s a flow. But, I have added in an invention of mine called “The Gate of Acceptance”…
Many organisations suffer from a disease called ‘Yes syndrome’; also known as the inability to say no to work that they really shouldn’t be taking on. This ultimately leads to very poor productivity of organisations. Here are some of the elements that go into this decision making…it’s a bit more complicated than you think…
Cashflow: Do we have enough money to cover the working capital requirements of the piece of work?
Skills: Do we have the skills to be able to make the product or deliver the service that’s needed?
R&D: Do we know how to make it?
Profit: Will doing it make some money? Or are we just being busy fools?
Brand: Do we want to get a reputation for delivering this piece of work? Also, does the company we are going to deliver it to meet our moral standards (you may not for example want to supply organisations that are heavy polluters)?
Capacity: Do we have the time and resources to be able to deliver it?
Downtime to re-tool: How much time will it take to swap from what we are currently doing?
Simple right? Well, not so much. I view the sophistication of organizations’ Gates of Acceptance as directly associated with their agility, productivity, and health.