I winced as my head began to throb. It was a late night studying for a big Chemistry exam, and I was positively exhausted. I laid my head down to rest before continuing to write long chemical equations. Yet the frustrating pain in my head continued to increase. I groaned. I had so much homework left, yet it would be impossible to get through it all with my throbbing headache.
It can be difficult to determine how common ailments like headaches are caused. Though taking a quick pain reliever might seem like a quick cure for something like a headache, it’s actually incredibly important to understand the root cause of a common ailment.This can be accomplished by monitoring our health conditions and lifestyle choices to better understand our bodies.
Just as individuals must track their health to understand why they get sick, businesses must constantly assess their own value in regards to sales, operation and financial advice, to understand why they might be unprofitable. As Baker discusses in Chapter 5 of The Adventure Begins When the Plan Falls Apart, business owners have the responsibility to holistically evaluate the health of their business. The process of targeting areas of growth and illness in a business will help keep a company healthy as it expands.
Luckily, neither businesses nor individuals are tasked to stay healthy on their own. We go to the doctor for checkups or when we’re feeling sick so providers can help us develop treatment plans. How might a business acquire a “checkup” or a “treatment plan” ? Businesses often require the help of what Baker calls a central “gatekeeper.” These individuals work to understand a company’s fiscal goals and assess its value. I find it intriguing how the role of a “gatekeeper” parallels a doctor; just as a doctor evaluates and treats your health conditions, a “gatekeeper” assesses the financial wellbeing of a business.
Money lies at the crux of a business, and a company’s value, or “health” is determined by its gross margin percentage, a financial indicator of business efficiency. As Baker points out in his The Adventure Begins When The Plan Falls Apart, when he first developed his business, he did not use the gross margin percentage to assess the worth of his company. Instead, he used his perception of the company’s growth as a gauge of its value, or “health”. In short, though his company was making lots of sales, these sales weren’t actually making the company more valuable. Once his “gate keeper” or financial advisor pointed this out, Baker had to re-evaluate the cost of his services and how the sales team was paid. This adjustment in sales can be compared to the treatment of a headache. In the same way that Baker believed that more sales would make his company more valuable, and thus failed to realize the root of a loss of value in his company, an individual might make the same mistake when treating a headache. For example, they might take pain relievers in order to relieve a headache, and subsequently believe that a lack of symptoms means that they are healthy. In reality, however, the pain relievers, like an increase in sales, are giving a false sense of “health” within an individual.
If individuals visit a healthcare clinic and consult with a doctor, they may have the opportunity to better understand what factors are causing a headache or illness. Through a health evaluation, a doctor can evaluate the root cause of a medical issue. For instance, a doctor might determine that a headache is a symptom of a different health issue, like shortened sleep hours. To alleviate a headache, a patient might consider adjusting their sleep schedule to go to bed earlier. A “gatekeeper” is similar to a doctor – they give advice to business owners regarding sales and management. Though a company may be selling less product than their estimated targets, this may be merely a symptom of a greater issue within the company. Perhaps sales teams are not incentivized properly to sell, or company morale is damaged. Almost acting as “business doctors,” “gatekeepers” have the opportunity to help companies revise broader sales and operations strategies that may help alleviate unhealthy “symptoms” within a company.
As we emerge from the pandemic, it’s imperative that you continue conducting check-ups on your business to ensure that it remains healthy. Just as you visit the doctor every year, frequent check-ups will galvanize you to gradually improve your sales strategy and long-term goals. Increased knowledge of your business’ structure and finances will pave the way for its growth and prosperity in the long run.