At this particular time, I was thinking, since I was talking about Sustainable business, so what is the main factors or attitude we should have in order to achieve it. So after pondering about this A lot of times, most businesses are made up of many staff, countless of reporting mechanism where no one really bothers to look at the report, or interprete what it means. In good times, such inefficiently is alright, as the company is gaining a lot of profit already. Hence when the management looks at the cash flow, and it shows a positive figure, everyone is happy and no one loses the job… However, inefficiency is long rampant in the organisation

When a business first started, it has the simplest business processes, everyone is busy working on revenue generating work hence the business was sustainable.. However, as the business grows, this profit making work gets lesser and lesser

The company choices of workers turn from people who can really perform revenue generating work, to massive hiring of students with MBA, or masters… This effect is similar to the Sukhomlinov Effect.

Sukhomlinov Effect as quoted from the website reads
“The Sukhomlinov Effect describes a common pathology of armies. Particularly in peacetime, armies tend to concern themselves more with appearance and style than fighting skill, which cannot, after all, be demonstrated. Men who “look” like generals–tall, rugged, handsome guys with broad shoulders and splendid posture who wear the uniform well–are more likely to be promoted than those with a real talent for war, since the latter may not meet the peacetime criteria. Although lots of outstanding commanders have been short, fat and slovenly (Ulysses S. Grant and Curtis LeMay, for example) they had to wait for a war before they could prove themselves. There is no known way to pick the most able generals in peacetime. As a result, despite a few notable exceptions, the generals who command at the onset of a war are rarely still in charge by its conclusion.”

Hence, after that because of selecting the wrong type of business managers, business are plunge into endless report generating, email writing activities rather then actual revenue generating activity.
These problems will not surface unless an economic crisis… This is when the inefficiency of companies shows… and the business leaders hired during the “Sukhomlinov Effect” period is entrusted to save the business… and mostly because of them being the “report hungry” generation… they started to do anything that can make their reports looks good..
Hence the following measure is often adopted by the our Sukhomlinov Business owners

1. Fire the ops staff… this is the easiest way to show that operating expenses is cut… But Usually, this is a dumb move as they are taking even more staff who are able to provide revenue generating activity to be gone…. While squeezing the daylight out of the remaining staff

2. Keep doing things like “Projected Revenue” and spends quarterly, monthly, weekly, biweekly time to come up with good looking reports that try to show “Operational cost” has decrease, which is usually produced by poor workers who are taken out from their revenue generating activity

3. Blaming all the ops staff for inefficiency when they are too busy to make business decisions. Every decision needs to call for a meeting, discuss with the entire Jedi council. as if there is NO OTHER PROBLEMS that will appear when the Jedi council is discussing one minor operation issue.

4. Keep writing, “its not my fault” email to save their backs, instead of doing real work to generate revenue.

There are many mentality business needs to change, in order to survive the crisis

1. Understand that the best way to save cost is not to fire staff, but rather to deploy them to revenue generating activity

2. Look out for how other expenses like consumables and utilities can be saved

3. Stop being report hungry, only identify the 1 or 2 that is needed, and where to get the information, they should be used to track whether the business is sustainable

4.  If the business is sustainable by itself, avoid cutting any more staff thinking that more revenue will come from them, rather, look for other areas to create a sustainable business.

5. Closes businesses that are not profitable, try to get new ones, and redeploy the guys, do not be too quit to fire off, as they may be pick up by rivals who is trying to create new sustainable business

6. choose a business partner wisely, remember to go for win win situation, a lot of times in my work i saw how different businesses tries to take advantage of each other.. and ended up burning each other in the partnership

7. Be careful when selecting your sales manager or business development manager, one can write “I have generated a revenue of 1 Million dollars” in his resume, when he actually did it by selling 1 million diamonds at $1 each

8. Understand that revenue can never be generated without good ops staff, most ops staff are abused and misused , while company cuts them off to do “cost savings”

9. Never think that by having a huge group of sales manager means you will get a lot of revenue. You only need one good one

10. If the owner cannot understand this.. he better start counting how much assets he has.. and try to find a new job claiming that he is the CEO of some other company before it collapse..

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