Aim to tackle your organization’s challenges head-on

We have been through the first half of 2022. For many organizations, this concludes the second quarter of the first half of their operational year.

Every organization has challenges and opportunities in operating its business. This year, it’s fair to say that we had macroeconomic challenges that impacted all of our operations. A brief list of such macro challenges would include supply chain disruptions, interest rate increases, staff shortages and inflation.

Everyone has worked hard to minimize disruption to their organization’s supply chain. Where possible, supplies were ordered and spread over longer periods. In other cases, supplies were ordered in larger quantities, which has the advantage of maximizing the ability to produce a given item, but at a higher inventory carrying cost. Alternative products and alternative suppliers have been evaluated and contracted to minimize supply chain exposure.

Interest rate hikes have a double impact for some organizations. For organizations that can pass on increased business costs to their customers, these actions are implemented where possible. For these organizations, this could mean increased revenue and revenue.

Organizations that provide services may not be able to pass on the impact of interest rate increases. They will find it difficult to adjust their business model to adapt to rising interest rates.

Staff shortages and customer service have a lot in common. The business adage of a 2:3 ratio of the cost of retaining a customer to acquiring a new customer also applies to building your team. Just as you don’t want to lose a client, you don’t want to lose a team member either.

It’s well documented that most customers don’t leave your organization because of price, although in exit surveys it ranks highly. Why, you ask me? This is an easy answer that will be accepted and does not require extensive discussion.

In many cases, the reason given for leaving one job for another is “more money”. More money is certainly a motivating factor, but it’s rarely the only reason for leaving. Promised opportunity, management, culture, team environment, benefits and more are on the list of reasons for departures. Often, disappointment in these other areas can trigger the “more money” trigger.

Inflation is a macro challenge caused by a combination of factors. It seems to have to run its course before a more normalized environment emerges. There seems to be a commonality with a major weather event. It is a situation that we have to endure.

By thinking about inflation and its impacts, history could provide an indication of corrective measures to be taken. I suggest two approaches. First, it is an academic approach, engaging professors and others who can discuss the history of past inflationary periods and provide insight into the actions taken in those earlier times.

The second approach is closer to home. Invite your organization’s former decision makers, industry leaders, city historians, etc. for lunch. The lunch conversation would discuss their decision-making at the time and the assumptions that supported those decisions. Their insight could be invaluable.

Cornell Wright is a consultant, author and business coach. His firm, The Parker Wright Group, located in New Haven, consults with clients in the areas of executive team decision-making, talent optimization through a business partnership relationship with Predictive Index, and training on equity and inclusion, diversity and organizational improvement. He can be reached at 203-521-6748 or [email protected]

Aubrey L. Morgan