A friend of mine recommended a book called Traction. Have you heard of it? He thought that my consulting company and my software company could benefit from implementing The EOS Model™.
What is the EOS Model™? Well, it’s a framework to help founders and CEOs understand everything from people to internal processes. Very simply, it’s just another way to run your business. There are a million models out there. Pick one.
I liked the book because I’m bad on processes. (“It’s all in my head, man.”) That’s the curse of the sole proprietor who is trying to grow. My language and behaviors are okay for me, but they’re not great for my CFO and the other people who are paid to support me. I waste a lot of time on inefficient business practices.
And as I was reading this book, I was simultaneously negotiating a new contract with a client. The procurement department told me, “We have a culture of Net 45.”
Let’s back up.
First of all, this chick was telling me that her company will hold on to my invoice for nearly a month and a half after I do the work because that’s how they do things. I sign a contract, perform a service over the course of a month, and then wait another 45 days to get paid. Wow, the gig economy is awesome!
But she was also telling me, “Our procurement department stakes its identity on Net 45. If I negotiate differently with you, I don’t know who I am. How do I add value?”
All I kept thinking is — Wow, that’s not culture, lady. It’s your process.
And if your process is your identity, you will never grow.
Process-dominant cultures are clandestine killers of innovation. If who you are as a company is defined by how you do things — rather than what you believe or create — you are never going to develop as an organization.
As I start to think about the next version of my business, I know it’s important for everybody to be aligned on what matters. Consistency is key. Alignment is critical. Let’s get our processes and language locked down, of course. But let’s not be captive to the system.
You and me? We’re better if we remember that corporate functions like procurement and HR are meant to support the enterprise — not define it. If there’s no flexibility built into the way you do business, you won’t do business for very long.
I have a minor quibble, Laurie. Net 45 *is* their culture. It says their culture is *stiff suppliers in favor of ME*.
I guarantee their Payables culture is NET 90 at best.
Hard-line processes like these are indicative of hard-line cultures, and those rarely play well with others.
Major oopsy above. Doubled up on a single direction!
What I meant: I bet they demand payment much more quickly from their customers, than NET45.
Most leadership does not want to deal with process driven supports functions. It’s too boring and tedious for them. So they create performance metrics around the processes.
Once a process becomes a performance metric – – it will be there forever. Net 45 is probably a major metric for that Company’s AP department.
I’m reading Traction right now. Thank God. And Net-45 if criminal. I would say, “then I have a culture of not working with you.”
That last paragraph. x 1000. All day long.