Uncovering Hidden Business Dangers

Everything is going great and the future looks good. Then, everything turns South, apparently without warning. But was it without warning? The following items are some of the areas where danger may lurk, undetected until too late.

Historical Financial Statements

Financial statements show past results and not the future (or even the present). They reflect the momentum of previous decisions and cannot be viewed in isolation without consideration of inter-period changes and why the change is taking place. Financial reports also do not reflect information that may not have been known when the earlier decisions were made.

Remember: financial accounting is different from managerial accounting. Financial accounting's objective is to record past actions within GAAP (Generally Accepted Accounting Procedures). Managerial accounting converts company data to a form needed for current decision making. If you use outside accounting or auditing services you will likely be getting only "financial" accounting when you need both.

 

Reorganizations

Changing assignments will not correct problems unless the underlying issues are adequately identified and fully addressed. Chastising or changing names on the organization chart will only shift the blame during the next review.

Remember: activity does not necessarily mean resolution.

 

Ignornance is Bliss

Not knowing about a problem does not mean it doesn't exist. Ignoring issues until they become obvious in the financial statements will mean that the problem has grown to full maturity and will likely be reproducing additional "little problems" as the organization tries to cope..

Remember: when everything is looking the best, that is the time to pause and search for hidden problems. Congratulations may be premature.

 

Personality orientation

Being "people oriented" does not mean that you can't look past the person and concentrate on the situation. Concentrating on personality is often a problem in small companies where employees are relatives that may be handling business functions based on their availability, not because of knowledge or experience. But this personality orientation is not limited to family businesses.

Remember: wearing rose colored glasses does not make the world rose colored.

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Transformative Networking connecting change leaders to enable self-organized grassroots change.
http://groups.google.com/group/transformative-networking

Next Steps While still conceptual, transformative networking offers the possibility of leading change through the networking of those already interested or involved in similar initiatives, effectively tearing down existing silos of practice that exist across disciplines and fields of work.  The next step is to develop a proof of concept built on the theoretical underpinnings above, possibly using Google Wave as the collaboration platform.  Included will be identifying the minimal structure and governance required to enable self-organization within the network while not constraining what might emerge.  Join this initiative and help create the future of organizing - networking communities of interest.
http://groups.google.com/group/transformative-networking    

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Last modified: July 19, 2009