Green Soul – Confronting the Chasm

Chapter Three of the Green Soul Chronicles

Green Soul Botanicals, an Artisanal Manufacturer

Green Soul Botanicals is an emerging artisanal manufacturer. As such, it began several years ago as a part-time utilization of artisanal talent, creating highly natural herbal Spa products for a few local customers. With the beginning of this year (2014), Green Soul chose to become a full-time business. At any given time, including now, there are many small artisanal manufacturers making this transition.

The Green Soul Chronicles, a series of posts to this blog, is intended to provide a real life example of how one emerging artisanal manufacturer approaches the challenges of growing into a Sustainable manufacturing business that provides right livelihood for those associated with it.

The Green Soul Chronicles

This post is Chapter 3 of the Green Soul Chronicles. Chapter 1 introduced Green Soul Botanicals, with emphasis on Green Soul’s mission statement.[1] The second chapter of the Green Soul Chronicles introduced Green Soul’s products. It also described the customers and markets Green Soul serves and discusses how Green Soul approaches those customers and markets.[2] In this post, Chapter 3, Green Soul confronts The Chasm.

The Chasm

Many artisanal manufacturers begin like Green Soul. An individual with artisanal talent and skill, perhaps with the encouragement of a small group of customers, begins producing small quantities for specific orders, perhaps in a studio within the artisan’s home, or in a garage, or on a kitchen table. Family and friends may lend a hand when needed. Orders are sporadic, so the business operates sporadically. Proceeds, at best, provide incremental income.

http://www.dreamstime.com/stock-images-arizona-sunset-grand-canyon-national-park-yavapai-point-usa-image35466284

The Chasm

If the products are good, the customer base grows. Orders become increasing frequent. At some point, the garage (or studio, or kitchen table, or whatever) just doesn’t work anymore. At that point, it becomes necessary to confront The Chasm – the yawning gap between the part-time informality of the garage and the rigor of a full-time business that generates an increasing volume of orders, fills those orders in a timely manner and provides right livelihood for those engaged in doing so.

Green Soul’s Approach

Just now (the beginning of September 2014), the immediate constraint to Green Soul’s growth is sales orders volume. So, emphasis during the remainder of 2014 will be on finding additional customers and on taking advantage of the holiday gifting season. Accordingly, an aggressive revenues objective has been set for the 4th quarter of 2014. That objective, of course, addresses the immediate constraint.

Capture - Strategy Map 1 - ExcelWhile objectives are important, they are only a beginning. A systematic plan of actions to enable the business to achieve those objectives is also needed. Green Soul uses a variant of Strategy Mapping[3] for developing that plan. The diagram labeled “4Q 2014” provides an outline.

At the top is a quantitative statement of the Objective (or objectives) to be achieved in the fourth quarter of 2014.

The Customers, Sales and Marketing section lists customer centered activities necessary to achieve the objective. For example, which customers are expected to buy which products? If additional customers are necessary, how will they be found and acquired? If marketing actions such as advertising or promotions are needed, then what and where? (the list continues…)

The Business Processes section lists the operational actions needed to enable the customer centered activities. For example, it might be decided (in the Customers, Sales and Marketing section) that two more sales people would be needed in order to achieve an incremental revenues objective. If so, business processes for locating, hiring, training, equipping, supervising ( … and so on) the new sales people may be needed.

Each of the actions identified in the Customers, Sales and Marketing section and the Business Processes section need be defined as action plans and assigned to some specific individual to execute.

The Resources section lists the resources (mostly money, talent or equipment – especially money) needed to conduct the activities listed in the sections above. If sufficient resources are not readily available, it is necessary to either find the resources or modify the activities. For example, using independent manufacturers’ reps rather than employing sales people may require fewer resources in the 4Q 2014 quarter.

But wait – there is more:

Business planning for a given period (4Q 2014, for instance) can rarely be isolated to that period alone. Many activities require longer periods of time to complete – enlarging a manufacturing facility, acquiring specialized equipment and developing a new product come to mind as examples.

Capture - Strategy Map 2 - Excel

The second diagram incorporates two periods – 4Q 2014 and 1Q 2015. In Green Soul’s case, it is necessary to revamp its website. That activity will begin 4Q 2014 – and will require resources in 4Q 2014 – although no benefit will be realized until 1Q 2015. In practice, it is almost always necessary to balance the longer term with the immediate.

So, Green Soul will confront The Chasm quarter by quarter, using Strategy Map diagrams showing three periods – presently, 4Q 2014, 1Q 2015 and 2Q 2015. The operative constraint for 4Q 2014 has already been determined, as has the primary objective. The supporting activities (Customer, Sales and Marketing activities and Business Process activities) will be determined and reality checked against anticipated resource availability prior to the beginning of the period (that is, before 1 October 2014). Objectives, activities and resource requirements for later periods will be entered tentatively.

Near the end of each period, performance against objectives and the completion of action plans are assessed. Objectives and activities for later periods are updated based on experience, changing circumstances and resource realities. For Green Soul, at the end of 4Q 2014, the diagrams for 1Q 2015 and 2Q 2015 will be updated, and a new diagram for 3Q 2015 will be initiated. On and on it goes.

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The Green Soul Chronicles are intended to provide an example — how one emerging artisanal manufacturer is approaching the problems of start-up and growth. Of course, all businesses are different: one size certainly doesn’t fit all. Use that which works for your situation.

Thoughtful comments and experience reports are always appreciated.

…  Chuck Harrington

Learn more about Green Soul and its products at www.TheSpaHerbalist.com

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published on Wednesday evenings.

Image credit: © Lunamarina | Dreamstime.comArizona Sunset Grand Canyon National Park Yavapai Point Photo


[1] See The Green in Green Soul, Chapter 1 of The Green Soul Chronicles, this blog: http://jerasustainabledevelopment.com/2014/05/21/the-green-in-green-soul/

[2] See Artisanal Manufacturing – Approaching the Market, Chapter 2 of The Green Soul Chronicles, this blog: http://jerasustainabledevelopment.com/2014/08/14/artisanal-manufacturing-approaching-the-market/

[3] For much more on strategy maps, see R. Kaplan and D. Norton, Strategy Maps, Harvard Business School Press (2004)