Is Your Company Exhibiting Symptoms of Being Out of Breath?

In a December 4 article in The New York Times Magazine, Lisa Sanders, M.D. shared the story of a patient who presented with the recurring symptom of fainting when he stood up from a sitting position. The medical professionals caring for the patient all knew that inadequate circulation of blood - with the requisite supply of oxygen - was the issue. What they were all puzzled by was - what was the cause of the inadequate circulation? After numerous tests and a methodical process of ruling out various potential causes, the attending physician posed the question “What else could this be?”

The question served as a challenge to the care team to consider factors outside their normal protocol or checklist of factors they run down. They had exhausted the traditional menu of considerations and were faced with a - what do we do now? moment. As luck would have it, a historical review of the patient’s medical record revealed that many years prior, the patient had undergone a procedure to remedy a medical emergency. As part of the acute treatment plan, a filter was placed in the patient’s main vein (the inferior vena cava) that supplied blood from his legs back to his heart. The filter was intended to catch any blood clots that might form as a result of the injury he sustained. Putting the filter in made perfect sense and had served the patient well for many years. The filter – while critically important at the time of the emergency procedure years ago - was not intended to remain in place indefinitely. Instead, once the filter had served its intended purpose, the standard plan of care was to go in and remove it. Once the current care team removed the filter, the patient’s symptoms disappeared. The dizziness, shortness of breath, and fainting spells were gone. In the past, there had always been a healthy dose of embarrassment and shame whenever the patient fainted. Now, in addition to his physical health improvement, his mental health was on a solid path of recovery.

This patient’s journey and the journey of many businesses are not dissimilar. It is not uncommon for local business leaders to observe that their business is not running at optimum performance. Perhaps invoice collections are slowing a little or new business order flow has experienced a trough in demand. Maybe workforce challenges have disrupted the progress of revenue-generating project completions or production capacity has reached its limit. Could supply chain bottlenecks/lead times have lengthened time to completion and revenue recognition?

Just like the patient in our introduction, business conditions evolve over time. The efficacy of processes or practices that worked previously may have run its course. It may be time to challenge the status quo. Much like the physician referenced previously, the business owner may need to ask, “What else must we consider?”

Is there something you did in your business - with good reason – in the past that might be holding you back in the present? Is there a clogged “filter” in your business processes that might be restricting the flow of cash, materials, labor, ideas, or innovation in your business?

The answer may not be readily apparent. That’s when having quick and ready access to a knowledgeable and trusted team, comprising both internal management talent and external expert advisors, is called for. It’s the business equivalent to harnessing the power of a team of medical professionals.

In our medical example, the afflicted patient confessed to embarrassment at the periodic, unexpected symptoms he exhibited in public. In business, owners and executives must be?mindful of the potentially serious consequences of delaying diagnosis and treatment – such dangerous reluctance motivated by the fear and discomfort of “public” embarrassment.

To meet important business challenges, business owners and executive leadership must exhibit a humble and fearless willingness to exhibit personal and public vulnerability by admitting something must change. They must expect and exemplify a sense of urgency, curiosity, openness to new ideas, willingness to listen, flexibility, and fearless decisive efforts to improve business processes. Such visible efforts will not only ?demonstrate leadership’s commitment, but also set expectations of the way the rest of the organization must embrace each challenge to enable meaningful progress in each step in its evolution.

Is your Banker a part of your clinical advisory team?

All businesses experience periodic head winds and turbulence.

Such turbulence: internal (processes, systems, talent), or external (economic, market, competitive, legal, technological) must not be ignored. The root causes, duration, and implications of such turbulence are crucial to understand.

Your advisory team should be the fastest path to diagnose root causes - and advise as to the duration and implications of your symptoms. An experienced banker is an important part of that team.

Why?

No matter the source of the turbulence, the symptoms frequently include some degree of circulatory (cash flow) impact – a clear indicator of unhealthy economic conditions or process dysfunctions. Diagnostically, a quick glance at some key ratios, coupled with some insightful Finance process questions, can quickly and effectively pinpoint root cause and lead to treatment plan options.

How is your business’s circulatory cash flow system working?