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Cash Flow: Does Your Organization Have Blocked Arteries?

TIM ATKINSON
Senior Advisor, HNI

Cash flow is the lifeblood of every organization. Just as your body needs good blood flow to survive, your business needs good cash flow too. Consider this: If a cardiologist discovers a blockage incash flow, wicked problemyour heart or an artery, a cardiovascular surgeon can remove or dissolve the blockage and restore normal blood flow. If you are lucky, your doctors will find and fix the blockage before serious damage is done.

It's the same with your business. Your organization probably doesn't have plaque build-up in its arteries, but it may feel the squeeze of unnecessary expenses disrupting its cash flow. You might not even realize the impact this is having on your business. Just as people usually aren't aware of their blocked arteries, business leaders often aren't aware of their blocked cash flow.

Don’t wait until your business needs a quadruple bypass before taking action. 

At the core of the wicked problem of cash flow are four key questions to challenge an industry's strategic logic and business model: where to eliminate or reduce expenditures, and where to raise and create value.  These aren’t easy questions, but they help companies more closely scrutinize their industries, helping them discover the range of implicit assumptions they make unconsciously in competing.

Eliminate

What are the things that your industry takes for granted?  Take a hard look at things your business regards as “givens” and look at the value they are really providing.  Consider which efforts could be eliminated.  

Reduce

Are you putting time and money into areas that provide little value? Which factors should be reduced well below the industry's standard? 

Raise

What areas are lagging in your industry?  What are the points of pain that your customers are feeling that are going unaddressed?  Think what elements could be raised well above the industry standard to improve customer satisfaction.

Create

What offerings or differentiators could be created that would be new and fresh to the industry?  How can your company establish itself as an innovator, creating a leap of value for your customers? 

It's never a good idea to take your cash flow — or blood flow — for granted. You get a wellness exam from your doctor every year, right? Maybe it’s time for a cash-flow check up. Learn more about HNI’s cost management advisory services.

Topics: Construction Transportation Leadership / Strategy Manufacturing