Run Faster and Faster Just to Stand Still.

Anyone who has been in business for more than a few years will be well aware that the pace of change has been accelerating rapidly. Indeed, the responsiveness of a business may be the key element of its competitive position. It affects all aspects of the business from new product development to order fulfilment: if competitors are faster then any competitive advantage is steadily being eroded. All businesses need to run hard simply to stand still.

Small Business – Advantage of Flexibility

How and where does this affect the small business? First, small businesses have always claimed the advantage of being able to respond quickly to customers' needs because they lack the bureaucracy and longer decision making processes of larger competitors. That advantage is disappearing as large organisations redesign the way they do business. Many years ago Toyota in Japan set itself the target that a customer could order a car in Tokyo and it would be delivered to them from the factory, with all the selected options, within three days. It may now be even shorter. How can many businesses meet their customer orders that quickly?

A large pharmaceutical and medical supplies company promises direct delivery at NHS prices to any NHS Trust (or General Practitioner) within twenty-four hours – typically it is less than eighteen. Many businesses cannot achieve that on internal orders.

Lost Business Due to Lack of Urgency

But there are even more visible ways of speeding business. Customers do not wait as long as they used to for a supplier's telephone to be answered. There several major companies where the telephone must be answered within three rings by someone – if there is no one around the chairman will do it, and ask questions as to why it was necessary. The writer knows he works this way because he has experienced it.
This is an important concern in all aspects of the business but especially in a sales department — one of the computer distributors monitors the performance all the time. The sales manager will take action if they are not meeting the three ring target. Do staff let the telephone ring because it is somebody else's job to answer it? The problem is managers will never know how much business has been lost because of not responding urgently to a customer.

Faster Paperwork Means Faster Payment

It has often been said that the sale is not complete until the money is in the bank. Managers should consider how long it takes from initial contact by the customer to the invoice being raised. Small businesses often complain about slow paying customers but it is clear that many such businesses give hidden credit by not raising invoices promptly: Many invoice at the end of the month which automatically adds an average of 15 days credit to all orders. But what about the time between receiving the customer order and despatch? The longer it takes the more working capital is needed to support the business. That is why large businesses are making fundamental changes to the way they do business. They have squeezed the obvious costs and are having to find new ways of improving productivity and cost effectiveness.

They have recognised that by shortening the elapsed time then fewer resources are needed to manage the delay. In most cases it is not about working harder but working smarter by not doing things that are unnecessary. The result is a happier customer, more motivated staff, lower costs and the capital is working harder — everybody wins.