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Friday, December 17, 2010

Forest or the trees?

You have heard the expression, “can’t see the forest for the trees,” but what if the problem is really that you are too focused on the forest?

The business world is full of consultants that use buzz words such as visioning and terms like mission statement. The idea is to get business people to understand the big picture and to think long-term. If you have attended many workshops you have undoubtedly heard the story about the three stone masons.
The building site did not look like much. The land had been excavated. Foundations had been prepared, and the first courses of stone had been placed. In several places the walls rose higher than a man’s head, and the building was beginning to take shape.

One of the elders of the town visited the site, and he saw three masons working on different parts of the building. He asked one of them what he was doing. The mason replied that he was building a wall, and it was back breaking work. The elder asked another mason what he was doing, and he replied that he was building a wall that would become part of a grand building that would last for generations. The elder then approached the third mason and asked the same question. The third mason replied that he was building a magnificent and mighty cathedral to glorify God.
The story is told to encourage people to value their work by the contribution that they are making to the ultimate goal of the organization. Each of the masons gave an accurate response. The first focused on the activity. The second took a broader view, and the third took a still broader long-term view. In the terms used by planners, the responses were about activity, mission, and vision, respectively.

That is a nice story, and it makes a good point. It emphasizes understanding the mission and working to achieve the vision. However, it ignores the simple truth that all three of the masons were doing the same thing. They were building a wall. Trainers using this story often add extra detail about how the first workman was unhappy. Then as they move to their descriptions of the second and then the third interview, the workers become happier. It is true that perspective matters, and it is true that having a sense of purpose is important. However the act of selecting stones, cutting them to fit, and building a wall is difficult and sometimes dangerous labor. Laborers, craftsman, and crew leaders finish the work day exhausted and sore. No amount of knowing that they were building a cathedral that would stand for the ages and glorify God is going to ease aching muscles and soothe calloused hands.

I’m not implying that moral of the story is wrong. However, I think it is time to refocus attention on activities. Paradoxically, the best way to accomplish the mission and achieve the vision may be to understand the activities of a business and to perform them well. We see this in sports. Consider baseball. As exciting as it is too see home runs or double and triple plays, those are not the things that win games. Teams win because they consistently get hits. Base hits put men on base and drive in runs. Football provides another good example. While the playing field is 100 yards long, the objective play after play is on moving the ball 10 yards in four plays for a first down. Teams that are able to do that over and over again win football games. Teams that focus on winning games or getting touchdowns lose. Teams that focus on moving the ball get first downs and win.

If you want to succeed in your business, you need to understand the activities that comprise your business. In the context of the story about the three masons, it does not really matter whether the mason is building a majestic cathedral that will stand for the ages if the stones are not selected with care and placed properly. While there may be glory in working to achieve the vision, success is dependent on the activities or tasks. While it is possible to get so bogged down with operational details that you forget the ultimate objective (not seeing the forest for the trees), it is also possible to become consumed by the big picture and the long-term objective. It is important to notice the trees. Without the trees, there would be no forest to see.

How to see the trees
Business owners have been thoroughly schooled in how to see the big picture and how to adopt a long-term view. They have participated in visioning exercises and learned to write mission statements. The idea of focusing on operations and activities may not be as exciting as strategic thinking, but it is time to return to basics.

One difficulty faced by companies trying to evaluate their operations is trying to find comparisons. Companies, particularly successful companies, tend to think that they are unique or that they have some sort of special recipe or secret sauce. While it is true that their success is probably due to some sort of competitive advantage, it is not true that they are unique. They may be faster or more efficient. They may be better. They may do some things differently, but they are probably not unique. The problem with believing that they are unique is it blinds them to the simple truth that most of the basic processes they use are similar to the basic processes of other businesses. This makes it nearly impossible for them to benchmark. Benchmarking is the process of comparing your processes to some sort of standard (or benchmark).

If you want to really understand your business, then understand the activities and details by figuring out the basic processes and then analyzing each step in the process. If you compare yourself to accepted benchmarks, you can evaluate how successful you are at each step. Consider sales. The typical sales cycle looks like this.
  • Prospect: Identify likely customers.
  • Contact: Approach customers and connect with them in some way.
  • Qualify: Evaluate how likely a customer is to purchase your product.
  • Present: Offer your product to the customer.
  • Close: Complete the deal. Deliver the product, and get paid.
  • Referral: Ask your customer for referrals.
Wholesale or retail, expensive or inexpensive, long cycle or short, online or brick and mortar does not matter. These are the basic steps. Attention to the details in each step is what will set you apart from your competition.

You can apply the same logic to your supply chain and fulfillment processes. The basic steps are similar for all businesses. How you handle details is what gives you a competitive advantage. How big an inventory do you maintain? How do you manage supplier relationships? How do you ship products?

You can deconstruct your processes even when they are not as obvious as sales or supply chain or fulfillment. Does your business rely on inbound calls? Do you have several people working phones? If so, then that activity can be compared to a call center. Does your business require a lot of transaction processing? Compare your business to other businesses with high volumes of transactions. Do you ship a lot of product? Measure yourself as a distribution center. Do you store and manage a lot of data? Benchmark yourself against data storage companies. Do you maintain a large physical inventory? The function to evaluate in this case would be warehousing.

Forests grow in natural cycles. The first things to grow on open land are fast growing grasses and other small leafy plants. The next things to grow are shrubs. The first trees are softwood trees, and in time the softwood trees give way to hardwoods. The types of plants and trees in a forest are also determined by climate, soil type and water. There are many things to see in a forest, and if you want to see them, you have to look at the trees.

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