[Management Column Vol. 39] Clarifying the Gap Between the Ideal State and the Current Situation

basic information

Please use this as hints for management decisions, such as building a management foundation, improving management quality, cash flow management, bank relations, business succession, and restructuring after the appointment of the second or third generation. Additionally, feel free to contact us with any questions or inquiries when putting this into practice.

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Applications/Examples of results

Company A, a wholesale business with sales of approximately 3 billion yen, was on the verge of bankruptcy a year ago, facing a cash shortfall in just two months. Therefore, I held meetings with all executives and appointed individuals who could be at the center of the reform. To share the sense of crisis, I made performance figures open to all executives and explained the current situation in detail. While promoting fixed cost reductions, including personnel cuts, to balance income and expenses, I clarified how much sales were needed to achieve profitability. Led by the executive members, I made them thoroughly aware every day of the gap between the target sales figures and the actual figures, and encouraged them to think about and take action on what needed to be done to close that gap. Three months later, thanks to the sales efforts, we achieved a monthly profit for the first time in 32 months. It was a moment when the entire company faced the same direction and sincerely worked towards the goal, uniting what had been a disjointed organization. All employees were smiling, and the atmosphere in the company had changed 180 degrees from three months ago. By clearly defining the gap between the ideal state and the current situation, we instilled a "correct sense of crisis," and the key to generating proper performance lies in how accurately we can align our subordinates in the same direction. Next time, I will discuss "Performance Management for Achieving Targets."