Hi everybody, I’d like for us to return to the basics of the Accountability Chart. I typically use this story when I’m teaching what the Accountability Chart in terms of what it is, and how it works. I call this story, The Lemonade Stand.
The Lemonade Stand is the simplest form of business in America. Interestingly enough, there are three major functions in that business:
- Sales: Someone has to sell the lemonade to the customers.
- Operations: Someone has to make the lemonade in the kitchen that will quench the customers thirst.
- Finance & Accounting: Someone has to count the pennies in the shoebox at the end of the week.
Now let’s fast forward to a company that has multiple millions of dollars in revenue. A complex organization with lots of people, and lots of seats. However, you will be hard pressed to find a company that has more than 7 major functions. The difference between a lemonade stand, and a multi-million dollar business quite frankly is only about 3-4 major functions. When we define those major functions, we just have to make sure there isn’t a weakness or a bottleneck that could bring the organization down.
When running a lemonade stand, if I’m not able to sell lemonade, the end is probably near. If I can sell lemonade, but I can’t make good lemonade, the end is probably near. If I can sell the lemonade, and I can make great lemonade, but I can’t manage cash, well you know how that ends. We can’t afford to be weak in sales, operations, or accounting without my lemonade stand being at risk of folding.
There are three things I want you to take away from this post. Have a clarifying conversation with your leadership team and define your organizations major functions. Once they’re defined, can you identify any weaknesses, and are you overthinking it? . If there were a weakness in the major functions, it could put the company in jeopardy, or take the company out of business altogether. Lastly, are there too many major functions that aren’t all critical to the long term success of the company? If so, utilize the Accountability Chart and try to smoke out why. Once you’ve recognized these three steps, you are in a position to Grow. Smart.