Solid Foundation

Any organisation to have a lasting impact must be built on a solid foundation and enough attention needs to be paid to get a solid foundation. It is always better to go slow at the foundation laying stage rather than succumb to pressures and try to show numbers. This is very much akin to building a multi storied tower where the initial period seems agonisingly slow. Much time and effort is spent on creating a rock solid foundation. Once this is done well, the rest of the construction is a much easier affair.

When we talk about foundation, we cover a variety of things as outlined below. Each of these will be dealt with in detail in later blogs. The typical areas to be created as part of the foundation include:

(a) An efficient operations platform to deal with recording transactions diligently and servicing customers
(b) A strong technology platform to ensure seamless flow of data with minimum human intervention and with strong checks and balances
(c) A robust credit policy, under-writing and risk management systems
(d) A focused collections and recovery system and process to deal with defaults
(e) A good fraud management process
(f) A good accounting and MIS to be able to ascertain profitability by unit / product
(g) A well thought out marketing and distribution plan
(h) A good organisation structure to ensure effective supervision and coordination between units
(i) Internal audit to ensure approved policies and processes are adhered
(j) Clearly laid out authorisation / delegation policies

It is only when all of these are working smoothly and effectively that one should attempt to scale up the business. Any attempt to do so prematurely with a plan to fix other areas along with growth will lead to huge issues. Each of the above are like the pillars of the business and weakness in any pillar will lead to the structure becoming weak and collapse.

For an organisation to be a long term player, the thoughts must be like that of a marathon runner and not like that of a sprinter. A marathon runner appears to be relatively slow to start with and may seem to be not making much effort. However, for the long run that is before him, it is better to conserve energy and run with a rhythm.

I would love to hear your views on this blog. Please feel free to leave a comment on the blog or send me a mail at vish.sesh@gmail.com and I will quickly respond.