This month’s blog and newsletter topic is “Can you manage by hope?” In these confusing times, if you and your company run without analysis, prediction and planning, you’re managing by hope.
Just how predictable is hope? Let’s take a closer look, using a real-life example.
Watching “Prediction by Hope”
A friend told me the story of a man who purchased a moving company. At the time he bought it, the moving company was incredibly successful. Word had been going around the community for years not only about how reliable and trustworthy the company was for anyone wanting to move, but also what a great company they were to work for. Their trucks and equipment were in great shape, always maintained and in good repair. The company had many testimonials from happy customers.
My friend wasn’t sure if the people who sold the company to the man described the entire operation to him, or if the man just chose not to listen, but after the sale, the company did not remain successful for very long.
About six months after the company was sold, my friend came around on a Saturday to work on a moving job, to pick up extra work to make a little extra money. The first thing he noticed, as he rode with another worker to the job in one of the trucks, was that the truck’s brakes sounded dangerously low—at least one of them was metal-on-metal.
It went from bad to worse. There were three men on the job, and after they loaded up the truck, two of them, including my friend, drove the truck to the client’s new house, and the third took his own car. Well, the third man was supposed to. He got to the house ahead of the truck, waited a bit, and decided to leave. When my friend and the other worker arrived, they were stuck with having to unload with just the two of them—and it was a big job, with heavy furniture and even a piano.
The job ran very late, and my friend went home exhausted. Needless to say, he decided never to work for them again.
But the real incredible part of the story occurred when he showed up at the company’s office to pick up his paycheck for the job. The company owner was sitting at his desk playing solitaire on his computer. As my friend was leaving, the owner asked, “Know anybody that needs a moving job?” He was sitting idly in his office, waiting for the phone to ring, running his trucks into the ground, relying on the company’s previous reputation to bring in business. He was operating entirely on hope and not for a moment understanding how unpredictable it was.
The company, of course, was not long for this world. The man who had purchased it couldn’t even sell it because it was worthless by the time he finished with it.
This is a drastic, but real-world, example of just how predictable hope is. That man could not predict at all when he was going to have more work—he only lived on hope that business would come in.
What Should Have Happened
Let’s rewind to the point where the man bought the company and see what he should have done.
First, he should have analyzed how the company operated before he purchased it. Where were they getting so many customers? What kind of marketing and promotion were they doing? What kind of marketing worked the best?
Then, how did the company operate internally? What were the operating costs, and how did the company meet them? That would include keeping trucks and equipment in good repair.
Armed with all of the information on the company’s successful operation, the man should have formulated a strategic plan to keep it going. And with that plan, he should have implemented the use of the company’s system of measuring the day-to-day, week-to-week and month-to-month numbers. He should have carefully watched them and made changes when called for.
The lesson he should have learned, and obviously never did: hope is unpredictable. Analytics, on the other hand, are predictable.
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