I was working with an organization on its annual plan and budget. The year just ending hadn’t been bad, but they did want to make some changes and grow in the coming year. This was reflected in their plan, but when we got to the budget, they just increased everything by a fixed percentage – from top-line revenue to every expense category. I told them this story:
You bake a cake, and it isn’t bad, but it doesn’t taste quite right, and it isn’t big enough, so you decide to bake another, larger cake. You get a bigger bowl, and a bigger mixing spoon, and you take the same recipe you used on the last cake and increase each ingredient by precisely 50%.
When the cake comes out of the oven, will you be surprised when it tastes just like the first cake?
But we do this in our businesses frequently. We have thousands of inputs to our businesses and perhaps dozens of outputs. It is common that we want different, bigger, and better outputs, but all too often we are reluctant to change the inputs. Remember, if we want the outputs to change, we must change the inputs.
Input + Input = Output
Taking the metaphor a step further, we must remember that, for a recipe to be successful, it must have widely varied ingredients. If we take a cup of flour, add two more cups of flour, mix thoroughly, we end up with, you guessed it, flour. So it is in business. Consider the people in your business, for instance. If we are all the same, the recipe just doesn’t work. As someone once said,
"If you and I are the same, one of us is unnecessary”
Consider also that each ingredient, by itself, does not necessarily taste all that good. Flour is not all that tasty by itself. And have you ever tasted a teaspoon of baking powder or baking soda? It is not pleasant. Similarly, a company that focuses almost exclusively on advertising, or on product innovation, or on treating its employees well, will produce results that are likely not consistently desirable or sustainable. Each of those elements is important, but by themselves, they are not enough.
Some questions to ask yourself:
- Have you stepped backed to taste the outcomes of your recipe lately? This can take the form of talking to customers, trying out the products you sell, walking into your own store with a fresh set of eyes (or get someone truly objective to do it for you), or using the services of your company yourself.
- If your results (such as the outcomes mentioned above, or perhaps financial or strategic outputs) are not optimum, what “inputs” can you or should you alter? Are there some that are over- or under-represented? Do you need to add some new spice?
- If your results are not optimum, what “inputs” should you eliminate?
- Whether it be key functions of your organization, elements of the marketing mix, or people on your team, do you have the proper ingredients in your recipe, and are you using them in the proper proportions?
© Ascent Advising 2006 (reprinted exclusively by SNEWS® with permission)
Dave Bartholomew is a principle with Ascent Advising, providing wide-ranging business advisory services to companies around the globe. His 30 years in leadership roles in the outdoor industry equip him well for coming alongside business owners and executive teams in moving their companies ever upward. His popular email newsletter, “Adages from Ascent”, brings to light vital and innovative concepts for running a business. For a free subscription, and to view past issues of the newsletter, visit AscentAdvising.com and follow the link for “Adages from Ascent”. Dave can be reached at Dave@AscentAdvising.com or 206-669-7055.