I clean the bathroom weekly. I swear I do. If a neighbor shows up unexpectedly, I want the house to look like human beings, not pigs, live here.
When we sell, we put on our very best face. Like entertaining guests, we show only the polished, organized parts of ourselves. The junk room door is locked. The upstairs bathroom my daughter uses is off limits. We hide the ugly, only showing the parts we think the buyer will be attracted to. The problem with guest behavior in business is that it obscures important, fatal flaws.
Flaws that can destroy a new relationship. Such as the fact that the scrub brush doesn’t always reach behind the toilet.
Get a realistic picture of what your new business can do before you buy.
Him: I wish we’d had you guys a year ago.
Me: Really? What happened?
Him: We bought a company we thought would be a good complement to the services we were already offering. We did financial due diligence. We did legal due diligence. Everything looked good. But once we got in there, we realized they had no idea what they were doing.
I asked the key questions they should have asked:
Did the company have the right tools to do the work they said they were doing?
Were they using those tools efficiently and effectively?
Did their people follow specific standards of operation?
Was there redundancy in their processes?
Were there bottlenecks in the processes?
Who had the final say on transactions?
Who were the primary authorities or was the authority dispersed?
My new friend repeated his wish that he’d known Clemson Road Consulting last year. He said they didn’t think about how important processes would be to an acquisition.
I knew. We know.
When I trained people through acquisitions (seven in three years) we saw a little bit of everything. We saw people supplementing bad software with desk top tools like calculators and spread sheets. We saw people bouncing email chains around the organization without ever making a decision. We saw sales people selling things the company couldn’t actually do and customer service reps and engineers having to talk clients out of canceling orders.
Businesses breed bad behaviors. They do it unintentionally. They do it without even knowing they’re doing it. But they do it nonetheless.
With deadlines and forecasts and revenue goals, businesses push profit over prosperity. There’s a subtle difference between the two. With profit, the business has made more money than it spent on the resource or product that earned it. With prosperity, it has ensured it will keep earning more money than it spends on the resources it uses to earn it.
Prosperity is about repeatable, predictable patterns. Prosperity means the business has found the best way to deliver product and services. A way that ensures profit while maintaining safety, integrity, and longevity.
Business processes are the flying buttresses of prosperity. They stabilize an organization to achieve its potential. They ensure as the organization grows it can repeat and improve its processes to reach higher profit. Business process due diligence is about looking at a new company, the one you plan to buy to complement your existing operations, and asking the right questions; diagnose whether that company is profit- or prosperity-oriented.
Are you ready to invest? Are you ready to buy? Are you concerned the company you’re prospecting may be putting on its sales face and not showing you what’s behind the toilet?
Let Clemson Road Consulting bring a process due diligence investigation into the relationship.
Call us at 803-569-8200.