When accountants want to solve a complex problem they turn to T-accounts, an excellent way to keep the debits and credits in order and visualise what is going on. Ask any accountant about T-accounts and they will wax lyrical. They take you back to the origin of double entry bookkeeping 800 years ago in the commercial world of Italy. Stripped bare of the bells and whistles of modern accounting systems the T-account provides clarity with no distractions or complications. There is nothing more satisfying than drawing these simple shapes on a piece of paper and following the debits and credits on their logical journey, safe in the knowledge that if every debit has a corresponding credit all will be well.
In these turbulent business times, brought about by the need to control the spread of the Coronavirus, a tool that helps clarity of thought when rising to challenges and finding new business opportunities would be a godsend. A business planning T-account is what is needed and thankfully there is one. It occurred to me what it was when I was thinking about changes made by a couple of Cornwall businesses.
One provided sales and presentation training delivered to groups on the client’s premises. Covid-19 stopped that, so the business went online after adapting the offering. Previously the courses were run over one or two days; that would be hell to sit through on Zoom in your own home, so the courses were split into smaller segments. This meant that the person running the course could check in between modules to make sure learning was being applied, making the course more effective. They invested in good kit; webcams and microphones to ensure professional delivery of the online events.
The second example was a small company that sold their products into supermarkets. When Covid first hit, and there was panic buying and supply chain issues, supermarkets announced that they would reduce the lines they stocked. The company was worried that their products would no longer be stocked so they investigated, using external consultants, options and instigated selling direct to the public. Fortunately, they were not dropped by the supermarkets so now they have two routes to market.
What both organisations did in effect was employ an old, simple management tool, SWOT analysis; Strengths, Weaknesses, Opportunities and Threats. A device similar to T-accounts. Instead of left and right you have four boxes to conveniently and safely put things in. Like T-accounts you can draw the shape on a piece of paper or a white board and write in the boxes bringing clarity. When everything is written down you pick on the most important things to exploit or mitigate. That is what those businesses did, identified threats and opportunities, addressed their weaknesses and played to their strengths. Simple but powerful stuff.