Last month I wrote about the DTC, Gareth Penney, and control. In the past 30 days, control has been a frequent topic of conversation, newspaper articles, and in a novel I’m reading. The author quotes John D. Rockefeller as having said, “I’m not interested in ownership. I’m interested in control.”
In the military, the question is who controls the geography. Who controls the battle? Who controls the situation? In Iraq, this is a 24/7 media discussion. In U.S. politics, the question is who controls the House? The Senate? The White House? In business, we focus on market share and who controls the market. Who dictates the terms of competition? This is especially true in the diamond community today.
The question of how control is achieved is a question of applying resources—ideas and money—to an opportunity. The mother’s milk of politics is money. We hear about how much candidates raise and how much they spend on campaigns. In business, we talk about how much a firm spends on advertising to generate demand or create an image. In the military, the question is how many troops and how much materiel is necessary and available to achieve the objective.
Management is often defined as “getting things done through others.” It’s accomplished through planning, organization, and control. Much rhetoric is devoted to planning and organization, but the money seems to flow to control processes. In a tech-crazed world, it seems we spend too much time “controlling” rather than doing.
As the new year begins, it’s appropriate to consider planning and organization in your business. Planning is the process of deciding where you want your business to go. Organization is the “how” of achieving that goal by using the right people. Control is the regular, periodic measurement of where you are in the process—and it’s a crucial part of the management function. It is secondary, however, to the planning and organization functions. Trying to run a business primarily from a control perspective is akin to driving a car while looking through the rear window—seeing where you’ve been and not paying attention to where you’re headed.
The challenges for 2004 will be much the same as they were for 2003, though it appears that the economy is on an uptick. That’s the good news! An improved business environment will make things better in general. But there are some clouds on the horizon, and retail jewelers and their domestic suppliers must address these issues.
On the retail side, gross margin return on inventory investment is an important topic. It’s also one that many retailers forget when business is tough and they’re just trying to make sales. The retail jeweler’s business is becoming more heavily concentrated in diamonds. Yet, the GMROI of diamond products is falling as the proportion of business in diamond products grows.
Control? The tiller is in your hands. Do some thoughtful planning and careful evaluation of your organization. Then decide where you’re headed, how you’ll get there, and by what methods you’ll control your business.