Visiting Fundamentals

A CEO of an FMCG conglomerate spent a day with his retail salesman at least once in a quarter and visited every retail shop (like an intern) to learn the retailer relationship, sales volume, product display on shelves, competitors’ presence, pricing and sales trend. He spent a day with customer service department, especially at front desk to listen the kind of complaints they are receiving. He had periodical meeting and discussion with his collection department to know the issues and ageing receivables along with his finance team. He ensures lunch with his factory workers once in a while to understand their personal issues. 

Within a span of two years, he increases the business to 400%, an amazing growth story of my hero of this article. He had spent considerable time on two most important aspects of business and was immensely confident that he will achieve extraordinary results.  (1) Ensure the fundamentals are strong and not eroded in the acceleration of growth (2) Made his deputies to be their toes, because they knows that boss knows every single thing that is happening in his business kingdom.

Why do we need to revisit our fundamentals?

Visiting fundamentals are like recapitalizing the business. Uninterrupted manufacturing productivity (productivity capital); Market and Sales depending on human intelligent (Human capital); Satisfying customer services (Customer capital) and Improving product quality (Brand capital) are key fundamentals that a CEO must visit every now and then.  These four capitals are primarily functioning with human resources and system.  Human resources are always vulnerable to fluctuations and the increase or decrease of productivity depends on emotional storage. A system is as good as the operator, the human intelligence, and can be faltered if fundamentals are weak. All key four fundamentals require constant monitoring and monetizing for growth. As a business head, one need to increase all these four capitals to keep the business competitive enough, if not outsmarting the competitors. 

Visiting fundamentals are the major drive for two business consequences. One is preventing unexpected or blind spots and other is perfecting organic growth progression or sequence. Most businesses start disintegrating from within aided by external developments. Meanwhile, most businesses able to withstand external threat when fundamentals are sound and well-coordinated.

Second is strengthening organic growth progression or sequence, a methodical performance action and supervision. As a business head one need to sequence the progression based on company objectives, values; and operating market. Primarily, the sequence should focus on:

1.      Cost effectiveness

2.      Technology effectiveness to increase productivity and customer relationship

3.      Smooth functioning of supply chain, logistics and manufacturing infrastructure

4.      People (productivity) measurement

5.      Adding value to customers or complimentary product services to improve product quality

6.      Moving to new customer segment

7.      Increase demand chain

8.      Expand business geographically

9.      Start over again like a cycle and add new elements in sequences depends on business expansion and progression.

Visiting fundamentals push and pull both productivity and marketing, in other word simply to ‘acquire more customers’, thus maintaining the company growth.