Be Willing to Start Again

How often do we just throw up our hands and surrender, feeling defeated. Does this mean we’re done trying? Maybe all that is needed is a brief break. We must be willing to use past failure to build on to eventually succeed. To do that, we must be willing to start again. Just like an athlete or inventor tries an alternative and holds onto to what did work, we too can do that in business.

Well, That Didn’t Work

Imagine you are trying to improve your company’s cash position. When you analyze things you realize that the additional cash you need is tied up in inventory. So how do you reduce your inventory to free up much needed cash? Let’s say that the first thing you do is identify items that have been in stock for a long time and are poor sellers. To deal with this you decide to have a special sale in hopes of unloading this excess. But, what if that does not work? Then what do you do? Some people would simply give up and say they tried to reduce inventory but it didn’t work. On the other hand, others would take another look and see if there were additional steps they could take. For example, what if you used the Pareto Principle, also known as the 80/20 Rule, to analyze your inventory by item? In accordance with this principle it is highly likely 20% to 30% of your inventory items will make up 70% to 80% of your inventory value. You can use this information, how long it takes to replenish items, and projected demand to refine the quantities you need to carry. It is not that unusual to find that levels carried can be reduced by two or three months. Just putting in place procedures to control the levels you carry will over time produce extra cash, perhaps even enough that you can avoid loans. The point is that just because one attempt at resolving a problem failed (in this case reducing slow-moving inventory), that does not eliminate the need to be willing to start again and look for another solution.

Is It a Complete Restart?

Have you even had the experience of trying to write a report and nothing seems to be going right, so you rip it up and basically start completely over? No matter what we are working on, that attitude can take over very quickly. We think that we have wasted our time. Consider if that’s really true? We should look closely at what we have already done and pull out the good parts. It could well be that just a few minor tweaks need to be made to get things back on track. Frustration can easily get the best of us unless we keep a cool head and proceed with purpose.

frustrated employee

We must be willing to start again but we must also understand that this does not necessarily mean we have to go back to square one. If we think about what we have already tried we almost certainly can pull out some useful things that will add value to our final resolution. This is common when dealing with an employee issue. Perhaps we have an employee who seems to be on the wrong track. Does that mean we just fire them and start completely over with a new employee? That’s probably not the case. An open and honest conversation with them may reveal that there are misunderstandings, or some additional guidelines, training or information are needed, or that perhaps the individual has too many responsibilities or is not getting needed cooperation from others. But, before we just decide that we have the wrong person for the job we owe it to them and ourselves to at least see why things are not working as hoped.

So think about how you approach starting again. Do you just give up completely, always deciding to make a completely fresh start, or do you take the time to evaluate what is going wrong and build off of what has already been done?

If you want to know more, contact AimCFO – Contact

As always, your comments are welcomed.

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