I know I have touched on operational disciplines in past posts, but it’s time to revisit that topic again. What continues to surprise me is the lack of information that goes into making key strategic decisions, especially with respect to forecasting a corporate financial path. There are obviously so many things to take into consideration for this area, but simply, do you have timely & accurate data that will contribute to either the turnaround efforts for your company or the aggressive growth that you find yourself facing in the immediate future? Either way, if you lack the supporting data, you have nothing but an outlook of unsupported optimism.

                In consideration to a condition of aggressive growth, do you have the appropriate data to identify the specific growth drivers for your business, the margin performance of each one of the revenue drivers, and the recent trends of your operational expenses?  And I’m not necessarily referring to the data of last year or the first half of 2009, but also your most recent results. If you tell me that you’re still working on closing the books for the month before last then you’ve already got an embedded handicap in the decisions that you need to make. What if the most recent few months are at the height of your selling season? Since this is a common theme in the Retail and Apparel space, you better know what those results are since your entire year may hinge on those results.

                What if you’re in the midst of a turnaround and looking to reposition the company in all critical areas, which will likely include revenues, inventory, operating expenses, as well as vendor commitments?  If there is the need to work out plans with key vendors, make significant adjustments to the operating expenses, or other material decisions, do you have accurate & timely data support that decision making process?  It’s only through the timely collection of that data can you deliver a game plan that will be endorsed and supported by vendors, believed in by employees, as well as provide the foundation for executing the plan and moving the company back into a stronger position.

                You can only have this data if you have the processes and operational disciplines in place. You can’t risk putting yourself in a position where it takes month(s) to finalize your results, collect & analyze the data, and belatedly affirm any previous forecast you had in place. You need to know what the pulse is week-to-week, you need to have a handle on your period’s results within days, and finalized within a week(s). In this environment there is no room for complacency or the late delivery of information. There is too much riding on efficient execution. Any slips will affect the credibility you have with your employees, vendors, and ultimately may lead to the poor development or execution of your strategy. So what is it…are you actually executing or are you going through the motions of unsupported optimism?

Thanks for reading . . . .

Jeffrey Ishmael