When the going gets tough …
… most business executives cut expenses. Consultant services are among the first to go. In tough economic times we consultants too-frequently hear some variation of, “Your proposal is great, but we simply don’t have the cash at this time to move ahead with it”. And lest you consider this blog posting an appeal to businessmen to hire consultants, let me assure you right-out, it is not. It is an appeal to businessmen to adopt an asset and investment optimization discipline and thus create a powerful force for growth, in both good and bad economic times.
By asset optimization I mean a process for assuring that every dollar of cash, every employee and every hour of time is aligned and consistently targeted at the best possible opportunity for growth – and if it isn’t, to re-target it. A process for executing that optimization exercise follows and is offered for you to consider. 
Step 1: Make an initiative attractiveness wish-list
Identify 6 high-yield, high-probability-of-success bottom-or-top line growth initiatives you could embark upon if your organization had the cash, talent and/or the time. Next to each item put the name of the best talent available to execute that initiative along with an estimate of the amount of cash and time (calendar months) it would take to execute that project. Rank the initiatives on the list from highest to lowest in terms of most attractiveness. Keep this list fresh by updating it no less than once a month.
Step 2: Search internally for assets (time, talent and cash) to reallocate
Identify currently committed assets that are the least productive in your company. I have found that a large percent of managers and owners do not want to confront this step, largely because it forces a look at non-productive employees, legacy initiatives and pet-projects.
As an example: If an owner has 100 employees, is it likely there are two that are marginally productive? Assuming for the moment that their cash outlay is $40,000 each, eliminating their positions would free up $80,000 for alternative investment.
There are certainly other sources of potential asset re-allocation and making employment decisions is emotionally difficult, for certain. Nevertheless, barring the emotional pain of confronting this particular an alternative, the list of potential resources that could be reallocated should be identified for each initiative.
Step 3: Make the tough asset re-allocation decisions
This step is why owners and GM’s get paid the big bucks – to make decisions on asset utilization.
A general on the battlefield does this all the time. He is constantly looking for points in the line at which to target his battlefield assets. He continually sends out patrols to discover opportunities to exploit to generate breakthroughs. Assuming his orders are not simply to hold, the good general always knows which segments of his line to hold and at which to launch an attack
If there is anything I would wish for owners and managers it a decisiveness gene
I recently experienced a client who delayed a critical asset-reallocation decision for a year, only acting when an emergency arose.
Why is such an approach is not used more often?
Through the years I have discovered three primary reasons that small-to-mid size business owners and managers don’t practice this discipline: 1) they simply never thought of it, consumed by day-to-day crisis-driven issues, 2) they want avoid having to make the tough decisions it points them to and 3) no one has held them accountable for working through such an exercise.
A consultant can only help them with the first.
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