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CrossFit for Your Business: A 3-Step Guide to Company Organisation [part 2]

Company Organisation

Company organisation can easily slip away from you.

Poorly implemented or maintained systems, changing staff members and lazy shortcuts can all add up to creating major issues within your business. Even when not an issue in and of itself, poor company organisation can be problematic when you are presenting your business to potential investors, or when introducing new staff members.

One of the issues is that if you have longstanding company organisation issues, they are often overlooked, ignored or adopted by new team members as ‘the norm’, so the insipid issues are left to fester indefinitely.

In part two of my new three-part guide, we will investigate the numerous problems that a disorganised company may have. These issues detail where your company may be falling short of its potential, but also provide red flags that can help you avoid significant repercussions.

The Problems Disorganised Companies Have:

They say the first step in solving a problem it is acknowledging you have a problem. If, after last week’s blog, you are now feeling your business is a bit out of shape, it often helps to further clarify why you may want to tighten up certain areas, systems or processes. This requires becoming more clear on the problems associated with an ‘out of shape’ business. 

It is likely obvious to you that the costs and problems stemming from a disorganised business are numerous. For the sake of keeping this article as brief as possible while attempting to create as much value for you as possible, we will identify some of the more interesting problems that come when trying to run a disorganised company.

Higher Operational Costs

When the same mistakes are repeated, more people are required to complete a set amount of work. If technology or systems aren’t fully utilised, it leads to confusion, increased operational costs, inferior productivity and fewer results.

Lower Accountability

When there isn’t agreement on what is specifically expected from an employee, it is difficult to hold them accountable for specific results. When this lack of clarity persists for an extended period the employee often defines a self-prescribed comfortable job description that is not optimal for the company.

More Difficulty Managing Cash 

To forecast your cashflow accurately you need accurate financial data. In order to achieve this you need people following the correct processes and disciplines to enter and reconcile the data correctly. This is rarely the case with disorderly companies.

When these financial management activities don’t occur correctly or consistently the financial data quickly degrades to the point where it is not trusted or utilised. The end result is that cashflow and profitability are monitored by gut instinct, which is nearly always wrong, especially as the company grows and the figures increase.

Lower Profitability

Gross profit requires consistent monitoring and communication. Disorganised companies often disregard current Gross Profit numbers, making it impossible to identify and fix issues as they arise in sales or production processes. 

Unfit companies often don’t know how much money they are actually making until viewing their annual financial reports. This is not an ideal way to optimise a company’s profitability.

Greater Risk

Not surprisingly, when you are paying more than necessary to maintain a functional company, there isn’t clarity on how the company is performing. This includes diminished risk assessments, poor financial management and a greater potential for problems that can put the business at risk.

Company Organisation

At this point, it is likely becoming apparent that the cost of sustaining poor company organisation is significant. Now let’s turn our attention to working through what’s required to have a tight business – one you are happy present to potential clients, investors or employees.

Next week, we will investigate what goes into creating a well-organised company, but for now it is important to address what you are likely thinking:

“Of course I’d like to have a more organised company; I simply can’t afford the time and potential cost of getting my business to that point!” 

So let’s address that first.

Abraham Lincoln famously said, “If I only had an hour to chop down a tree, I would spend the first 45 minutes sharpening my axe.” The classic mistake most entrepreneurs make is taking a ‘Ready-Fire-Aim’ approach to activities within their business. This creates a significant waste of time, money and energy that is impossible tough calculate. Getting your company organised, fit and healthy doesn’t and shouldn’t happen overnight – but with efficient and well-executed planning it can progress smoothly and steadily for resounding and noticeable results.

When I’m invited into companies to improve profitability and/or productivity, nine times out of ten we begin by removing activities or processes that aren’t producing the desired results. And when then adding more effective activities, we take a ‘measure twice cut once’ approach ensuring we are only adding productive strategies rather than reactive, unclear, or poorly-executed activities. 

Much of this clarity comes from having a defined framework with which to manage your company. What is the management framework you are using for your company? If you can’t name it, it likely doesn’t exist. If this is the case, it’s likely because you’ve never attended a course or training that describes a practical and applicable management framework. It’s somewhat ironic that we don’t receive an operating manual for the vehicle that is supposed to protect our business’s and family’s future.

Regardless of whether you have a business operating system, you can always refine your company organisation so it will run more profitably and display better potential to buyers, investors, bankers and key employees. 

Next week, I will share a method to do so that can be both efficient and affordable to any business.

If you’re in any doubt as to your company’s health or how to begin creating a business operating system, explore my website further, or book a FREE 60-minute consultation today.

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CrossFit for Your Business: A 3-Step Guide to Business Organisation [part 1]

Business Organisation

When is the last time you wished you could improve your business organisation? Many business owners tell me they recently felt that way when they wanted to look into some potential bank financing. Others comment on how they didn’t feel comfortable having a discussion with a potential buyer or investor because they didn’t want to reveal the disorder lingering beneath the surface of their business. 

Beyond the often trivial or fleeting feeling of a little embarrassment that can come from thinking about sharing your company details with an outsider, there are often real costs that are associated with having an out-of-shape and dysfunctional company. 

In my new three-part guide, I will take you through the stages of improving your business organisation, first by identifying what a disorganised company looks like, and then delving into the problems this may instigate, before presenting a collection of solutions towards creating a business profile you can truly be proud of.

This week, we begin with identifying the warning signs that may suggest a lack of organisation within your business. 

What a Disorganised Company Looks Like

But before we explore some of the challenges created by not having an organised business next week, it will likely help to clarify what creates that lingering feeling of disorganisation within a company. 

Describing a disorganised or ‘out of shape’ company can be done by breaking out the three component parts of any business – its people, its processes and its technology. 

The People Within a Messy Business

If a team is unfocussed, despondent or poorly informed on a company’s structure and functionality, it can cause some reluctance, even embarrassment when presented to prospective employees, investors or clients. Team members will likely be unclear on the company’s direction, what the company stands for, or what its competitive advantage is.

The team members of a disorganised company frequently don’t come across as passionate or motivated in what they do or how their input contributes to the rest of the team and business at large. They will frequently display a myopic focus on what is relevant to them, without much appreciation for the greater vision. 

There can also be perceptible cliques within the organisation that create a certain polarisation or dissociation with the company or team as a whole. This may not be recognisable at a level of a potential investor, but if a key potential employee spends much time talking with various team members the cracks in the team quickly begin to appear.

Processes within an Out of Shape Business

A disorganised company lacks the clarity to perform consistently. This is partly due to not having clearly defined processes, but also by not having the discipline to train new team members consistently, thereby instilling strong habits that endure over time.

Common symptoms of companies with insufficient processes are:

    1. Low profitability due to inefficiency and elevated labour costs
    2. Difficulty in training staff to be productive quickly
    3. Repeating mistakes already experienced by the company
    4. Low levels of accountability by team members when things go wrong 
    5. Difficulty in delegating tasks and activities away from the strongest team members.

Technology within a Disorganised Business

Messy companies often have numerous Band-Aid fixes or partial technology solutions. These partial technology solutions lead to a lack of trust in the data and knowledge that resides within the various systems. This then generates a number of bad habits that lead to ineffective reporting and numerous direct and indirect costs to the company and the company’s owners.

Some bad habits are:

    1. Creating manual work-arounds for otherwise automated or centralised processes that result in information being stored in multiple locations
    2. Not using certain functionality within existing applications through laziness or a lack of education 
    3. Duplicating information and maintaining it in spreadsheets rather than in the native application. This is frequently seen in Cloud-based accounting software
    4. Using one’s ‘gut’ rather than actual company performance information because the data isn’t accurate. Leaders tend to use ‘gut instinct’ rather than information when they don’t trust their data. This is how most businesses financially fail. Leaders then try to estimate cashflow requirements rather than turn to validated data and take the appropriate actions.

Business Organisation

If any of this sounds remotely familiar, it could be that your business organisation is distinctly lacking in some areas. The issues may be minimal and the solutions simple, but by acknowledging the underlying issue and further analysing your company processes, you can increase efficiency, promote morale and avoid potential loss to and even failure of your business.

If you are unsure of your business’s health status or are uncertain about how to take the next step, you can find a simple company self-audit on my website, or feel free to book a 60-minute business coaching session with me today.

And, as always, enjoy the process!

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Struggling to Pay Vendors on Time? It Could Be Your Cash Flow

I hear it more and more: companies are struggling to invoice their work, reducing cash flow and making it harder to pay vendors.  

However, delay in billing for your work is not an excuse your key vendors will likely accept for very long before it impacts your relationship with them. The most common repercussion is that credit terms are converted to more immediate payment terms rather than a longer-term repayment arrangement.

Not only will this affect your cash flow, it can also greatly impact your productivity if you are unable to purchase the resources required to convert into profit.

We may try to blame our delayed revenues on outside problems but those are most often out of our control and not helpful. In our practice, we regularly see early signs of delayed revenue problems with our clients. Fortunately between our three-way cashflow forecasts and other KPIs (Key Performance Indicators) monitored on company performance scorecards, we identify these problems early enough. We are then able to guide our clients to finding solutions before the issues negatively impact cash flow and the ability to pay vendors.

One solution is to modify a client’s sales contracts to protect against project delays. Another solution is to identify a risk early enough to be able to add additional suppliers to a client’s supply chain strategy.  

In a third situation, clients identify a project management strategy as a win/win and agree to provide additional payments in advance.

The 3-Step Cash Flow Solution

  1. Use shorter-period client invoice terms
  2. Pre-plan for future vendor invoices
  3. Negotiate a pre-pay installation plan with vendors

The primary advantage of managing drops in revenue is identifying the causes early enough to be able to find solutions that avoid cash flow challenges. To do this, you should have effective company scorecards and accurate three-way cash flow forecasts. If either of these strategies is missing in your company, I suggest you talk to your business advisor or account for some further guidance. If you don’t have confidence in either of those team members, call me today and we can walk you through how to get your revenue and cash flow under control so you can maintain strong relationships with your vendors and partners.

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Is Tax Debt Killing Your Energy & Focus?

Tax Debt

Many business owners don’t have the processes or team to help them plan ahead for quarterly or annual tax debt. 

This results in business leaders being caught off guard without an allocated tax budget and unable to pay the amount owed.

Hidden Tax Debt

Frank*, a Better Execute client and owner of a 10-person consulting firm, suffered precisely this issue prior to working with us. His business went through a period of increased growth but he failed to account for the additional tax obligations that came with the elevated revenue and profits. The result was that this looming debt left him feeling frustrated and overwhelmed. Over time, Frank began losing his motivation and could not envisage a future without the pressure of tax debt.

After Frank was referred to us we began by analysing the problem at hand, thoroughly discussing Frank’s concerns and business position. This allowed us to identify several business solutions and assure Frank that a positive resolution was at hand. Frank later admitted that that conversation alone was enough to help him break free from the weight firmly pressing on his shoulders. 

This is important to remember if you are feeling overwhelmed: just the act of talking through your situation with someone beyond your colleagues can often be beneficial. Even if the other party doesn’t give you any strategies of their own, it can be enough for you to find clarity, so be sure to talk with someone!

Tax Debt Solutions

After our initial conversation, we worked with Frank on a brief gap analysis to see what was missing from his current team, and implement processes to allow him to move towards resolution. We soon found that he hadn’t ever learned about the need for a cashflow forecast. 

Our second objective was to begin determining a growth projection, not only to identify cash flow and budgets, but also to estimate future tax bills.

We then helped Frank negotiate a very conservative tax repayment plan so he could feel that the problem was under control, and that the solution still allowed him peace of mind, alleviating the weight of tax debt on both his business and personal life. 

As soon as this plan was put in place Frank’s stress levels seemed to vanish. He regained his energy and drive which resulted in his company growing once again. But this time we ensured it was managed in a way by which he could monitor the increasing costs and tax obligations as the revenues grew. This increased the transparency and structure of cash flow, assuring him that when the next bill arrived he would be in a far better position to manage and repay it. 

Planning For Your Future Tax Debt

If you are feeling stressed about your tax debt, it likely means you don’t have a reliable plan or strategy. Most importantly, don’t despair; I truly believe the universe will never give you a challenge you can’t handle. There are many ways to get yourself back on track and even stronger than before. The only thing you can’t afford to do is do nothing and hope the issue goes away. Take the first steps towards of action today, finding both the emotional support you need as well as the business knowledge required to develop an effective plan. 

The 3-Step Tax Debt Solution

  1. Establish a long-term tax fund
  2. Create a growth projection to forecast future debts
  3. Efficiently negotiate and manage your repayments

When you hear a solution strategy you believe in, it will feel like a weight is lifted off your shoulders, even before the debt is repaid. 

If you’d like, call us for a chat. There is no charge and you will likely start feeling better immediately.

Enjoy the process!

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Letting an Employee Go

Have you ever struggled with letting an employee go or working to keep them.

You might spend hours, days or even weeks in emotional discussions with business leaders trying to understand how to get various employees to acceptable levels of performance, but to no avail. This article focuses on providing a clear framework to diagnose whether you have an opportunity to fix a less-than-ideal employee performance situation or whether more drastic measures are needed.

With the current employee shortage it is always tempting to retain every employee possible rather than letting an employee go. However, the retention of one weak link can cause ramifications that may become detrimental to the entire team or business. Thus, it is always better to remove these weaker links because the cost of retention will always be higher than the modest void an exited employee will create in the short term.  

Step 1 for Letting an Employee Go – Core Values

Deciding who is worth the effort to retain versus those better removed is actually quite easy when you approach the decision-making in a well-proven way. The first step to letting an employee go is to measure the employee in question against your company’s Core Values. 

This will be difficult if you have not developed well-established core values to promote and demote team members. But thankfully it is never too late to start. If you understand the necessity of Core Values and how they work within organisations but you have yet to implement this strategy into your company, put this article aside and spend the time necessary to implement them effectively. You will be grateful you did and it will always be time well spent for long-term gain.

If you have identified your company’s Core Values then ask yourself how frequently you observe the employee in question embodying them using a criterion of Frequently, Sometimes or Never.  For an employee to align with your organisation there shouldn’t be any Nevers, with a mix of Sometimes and Frequently. It can be personally confronting to exit your first employee using Core Values as a decision-making process but when you see the impact on the rest of the remaining team you will realise that your decision of letting an employee go was wholly justified.   

Step 2 for Letting an Employee Go – Ability

After you determine whether the employee in question aligns with your Core Values, the next step is to identify whether they have the ability to deliver what is required in their position or seat. In order to do this both objectively and effectively, it is important to have the employee’s position or role well defined. For this, three things should be addressed:

  1. What are the position’s key deliverables? This explains ‘why’ this position exists and how you know it is being done well.  
  2. What are the main activities for the position? This should provide insights into what the person does for much of their time.
  3. What are the main Key Performance Indicators (KPIs) for the position? This will avoid any doubt in what the expected level of activity and performance needs to be within the role.

With this review of the employee’s position in hand you are now ready to evaluate your employee by asking yourself three questions:

  1. Do they fully Understand their position? Often times there can be a fundamental misunderstanding regarding what is important about a position versus what is simply ‘nice to have.’ When you have a clearly-defined role as described above this is less likely, but most businesses don’t do a great job of defining in writing what is critical about a role – the position’s key deliverables. If you have any doubt whether they fully understand the position you need to invest some time in ensuring this is not the issue.
  2. Do they have the Capacity to perform at a level that is required for the position?  Although one could use sophisticated cognitive assessments to determine this for some roles, typically you as a business leader can often get a good impression simply by asking yourself this question. By answering yes to Question One you know they understand what is expected of them, now it comes down to whether they have the skills, disciplines or time management capabilities to do so. If the answer is no then the employee is likely not a fit for that position and you either need to redefine their position or consider letting an employee go.
  3. Do they have the Desire to perform the necessary activities required for the position?  Up to this point you have confirmed they both understand and have the capacity to do what is necessary to be successful within the position, the question is whether they want to. This is an important final hurdle to clarify because people can get tired of things that they are really good at. Problems answering this question in the affirmative require collaborative discussions with the employee to find a win/win, potentially adapting their job description in order to keep them enthusiastic and motivated while still fulfilling the original role. These types of challenges can often be resolved quite easily if diagnosed and addressed early on. Often times a great employee leaves a company without warning with an explanation that they became bored and wanted to find new opportunities.
Letting an Employee Go
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Company culture and your core values aren’t just common topics in the pages of business management books, they are well-proven strategies for growing strong and profitable companies. Clearly defined position descriptions aren’t simply an HR requirement, they should help you and your employees clearly understand what is required of a role and how to measure whether a staff member is fulfilling that role proficiently.

Letting an employee go is never easy, but by following this process to assess your employees we are confident you will develop a happier and more productive team.

Enjoy the process!

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The Value in Asking for Help

Asking for Help

The Value in Asking for Help

If you are like most of us you are not a big fan of asking for help. 

Although you might utilise this strategy in an effort to cultivate creativity, research shows that not asking for help is most often our default reaction, rather than a choice, due to a fear of possible rejection or disappointment. 

This article’s aim is to remind us of our choice and bring attention it some of the limiting beliefs many of us have developed over the years around asking others for help.

To be clear, I am a recovering addict of self-sufficiency. Amanda Palmer’s book, The Art of Asking helped shine a light into a corner of my emotional world I had been keeping partitioned off since childhood. 

In the spirit of keeping this article short, one big idea on this topic of asking for help is to realise that we have wrongly associated asking for help with vulnerability and rejection. 

Misunderstanding Asking for Help

We’ve mistakenly learned to ask for help from a belief that the person we are asking holds the power in the exchange. So the request is coming from a position of shame or weakness rather than a more empowered mindset.

On the flip side, at other times we have asked for help coming from a point of expectation which happens when we feel power over another person. This often results in a feeling of disappointment in the asking process and possible resentment on their part.

The reality is that asking for help should be seen as a collaboration between two parties where both can receive value in the exchange. This type of asking can come from a place of respect, one that focuses on helping one another where there is no judgment tied to the outcome. There is a request and a response that becomes mutually beneficial for, or at least equally appreciated by both parties. 

Whether help is ultimately given in the common form of time or money is immaterial. Sometimes people will decide to help and other times they won’t feel able to. What matters is whether you are approaching the request from a place of respect and that you remain open to whatever choice the person makes.

Asking for Help in Business

So what can this concept of asking look like in business? Obvious examples can be seen in sales. You likely know some salespeople who don’t ask their customers to buy their products and services out of fear of rejection. Others set their expectations of their customers far too high, inevitably leading to disappointment. Whichever perspective they may take, most salespeople could improve their ability to have win/win interactions with customers where they share what is important to them and elicit similar insights from the customers. 

This skill of asking for help reaches far beyond sales, applying to all aspects of company dynamics. How about a boss asking a direct request for help on a project? Often the boss doesn’t want to be disappointed in the employee so they never ask in the first place. This can lead to the mentality of “if you want something done right, do it yourself”, which in turn can create frustration, annoyance and sheer exhaustion. Other bosses might not want to inconvenience the other team member because they are already busy or there may be fear around looking incompetent or admitting one’s own shortcomings. 

All these scenarios don’t end as well as if the boss were simply to be open and able to ask for help in a collaborative and respectful way. At the very least, they demonstrate their humanity to another team member and likely gain more goodwill with them even when no help can be given. Others may result in the boss receiving some additional and unexpected support. 

How to Ask for Help

To be clear, just asking for help isn’t good enough because when it is done poorly it is often detrimental to relationships, appearing demanding and irresponsible. Our opportunity here is to gain more courage in receiving what we really want and need by asking for help in a way where that creates value for both parties with a lack of judgement on the outcome. Respecting a person’s willingness to help, regardless of the effectiveness and ultimate results of that assistance, is the first step to a stronger, mutually accepted relationship.

So get out there and ask people for what you really want. Just be sure you do it in a collaborative and respectful way!

And until next time, enjoy the process!

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Effective Financial Management | Blind Spots Part Five

Financial Management

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

Blind Spot #5 – Managing the Financial Aspects of Your Company

This article focuses on the fifth of five blind spots many business owners have when trying to grow from 5 to 50 employees. In our previous article, we discussed the first blind spot: not seeing the value around consistent company planning. The second blind spot focussed on how to maintain employee accountability, while the third highlighted seeing the importance of high-quality weekly management meetings. Last week, we highlighted the importance of efficient company performance monitoring, which brings us to the final blog of our series.

The fifth blind spot involves not managing the financial aspect of the company. Too often business owners begin their business on a shoestring and adapt to monitoring cashflow by how much money they have in their bank account. Although this is never advised it can work initially when the financial numbers and expenses are small. This quickly changes however, and when revenues and costs go up it becomes impossible to manage cashflow based on your balance. 

Financial Management Pitfalls

The most classic miscalculations come in the form of tax bills and annual costs that are not amortised over the whole time period. These ‘lumpy’ sporadic bills often drain the business accounts unexpectedly. If too many of these surprises sneak up on you, the business rapidly develops significant issues.

Too often, the first strategy used by entrepreneurs is to forgo paying their taxes. The tax department then transitions to becoming a lending institution, with excessive rates of interest that only slip you further down the slope. This dynamic often continues indefinitely. When the company does well enough on the sales side of the ledger, it can work its way out of debt, but too often the weight and stress of the tax bill become too much for the company and owner. This self-perpetuating dynamic continues, and eventually becomes too much for the company to endure.

Outsourcing Financial Management

It doesn’t have to be that way. We find that eliciting the help of an outside entity like a virtual CFO can dramatically improve both the dynamics and likelihood of business and financial success. A CFO-like advisor can act as an objective third party by removing the financial management blind spots and quickly implementing objective checks to monitor how the company is financially performing. This gives you greater accountability and streamlines the process of managing your outgoing financials.

A more specific financial management blindspot that virtual CFOs can help with is with cashflow forecasting. Even the most basic types of financial disciplines involve monitoring financial results in the form of monthly and quarterly financial reporting. Looking into the future is as important as looking in the rearview mirror at how a company has performed.  Effective forecasting offers insights into how the company will perform, providing all-important feedback on what adjustments need to be made now to assure future financial success.

Financial Management: Conclusion

Both strategies help a business owner and their team be more realistic in terms of how the company is performing.

In conclusion, it is important to recognise one’s desire to guess how their company is performing. This avoidance of objective and predictive information exposes an owner and their business to a great deal of unnecessary risk. Virtual CFOs are wildly cost-effective. Thus it is fitting to say, ‘an ounce of prevention is worth a pound of cure’!  Remove the financial management blind spot today and start better monitoring both what the company’s needs are now as well as how it will likely be performing over the next 30-60 days.

Until next time, enjoy the process!

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Performance Monitoring for Your Company | Blind Spots Part Four

Performance Monitoring

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time. Let’s take a look at the benefits of Collaborative Accountability.

Blind Spot #4 – Lack of Consistent Company Performance Monitoring

This article focuses on the fourth of five blind spots many business owners have when trying to grow from 5 to 50 employees. In our previous article, we discussed the first blind spot: not seeing the value around consistent company planning. The second blind spot focussed on how to maintain employee accountability, while the third highlighted seeing the importance of high-quality weekly management meetings.

The fourth blind spot lies in not realising the importance of consistent overall company performance monitoring. This exists for two main reasons:

Business leaders think they mentally maintain their company performance monitoring & don’t need ‘reports’ to tell them how things are going.

This may be true to some extent but this belief comes unravelled when things become more complex or detailed. Mentally maintaining a general idea of the sales volume is more manageable than tracking the gross profit on a specific type of work. Additionally, we tend to forget how numbers are trending even when they are important to us. Utilising efficient, documented performance monitoring, such as with a company scorecard, retains performance information objectively so it removes our tendencies to remember things the way we’d like versus what actually occurred.  

Business leaders mistake financial reports for company performance monitoring.

I agree with most business owners that there is minimal value (though certainly some) in reviewing numbers that occurred in the previous month or quarter. It is like thinking you could affect the outcome of a game by watching the replay highlights. Effective company performance monitoring is about reviewing numbers where the results indicate how the game is going to end if things continue on the current path. This gives the business the all-important opportunity to take preemptive actions that can affect outcomes. This is the difference between a KPI (key performance indicator) and KPR (key performance result). An Indicator attempts to predict the future while a Result is something that cannot be changed or affected.

Even when business leaders realise they can’t effectively monitor their business without first monitoring KPIs, it still requires work to obtain an effective scorecard for a company.  

The goal is to keep your performance monitoring scorecard to between 7 and 10 statistics, though when beginning that number is often more like 15-20. Over time and consistent performance monitoring, companies settle into a scorecard that has around 10 numbers that include mostly KPIs but a few KPRs. The management team develops a level of trust and comfort that when the numbers are good the company is actually doing well, and when numbers fall off, they are highlighting issues that need to be resolved in order to keep the company’s financial results on track.  

When business leaders invest the time and energy required to generate effective company performance monitoring it allows them to better predict what’s coming and to be able to navigate the inevitable issues that arise in business from time to time.   

Scorecards should add fun and objectivity to a business and its management team. Start visually tracking more of your critical performance numbers consistently and see what happens to your ability to identify problems sooner and begin resolving them faster. After all, problems usually get bigger the longer they are left unattended, so the sooner you spot them, the easier it will be to resolve them.

Until next time, enjoy the process!

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Weekly Management Meetings | Blind Spots Part Three

Weekly Management Meetings

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time. Let’s take a look at the benefits of Collaborative Accountability.

Blind Spot #3 – Not Seeing the Value In Weekly Management Meetings

This article focuses on the third of five blind spots many business owners have when trying to grow from 5 to 50 employees. In a previous article, we discussed the first blind spot which was around not seeing the value of consistent company planning and the second blind spot focusing on how to maintain employee accountability.

The third blind spot lies in not realising the value and importance of a weekly management meeting. Many jokes are made about meetings because good meetings are hard to come by, but when done well, an efficient, well-executed weekly management meeting is an absolute game-changer.   

Do you struggle to see the value in weekly management meetings? If so, it is typically because you don’t feel you and your team have time to meet, when staying ‘productive’ seems to be a more practical use of your time. Another common issue is the feeling that meetings aren’t very productive. Last but not least, a leader can feel it is difficult, possibly even painful, trying to facilitate a meeting week over week when it seems to be a repetition of the previous week’s topics.

Truth be told, all those things can be legitimate challenges of past meetings, but it doesn’t have to be that way, and when weekly meetings are run well they will raise both the economic and productivity aspects of your business.  

What’s required to create effective weekly management meetings?  

Defining the format of your weekly management meeting is essential. Whether it is the staff included or the structure and schedule of the meeting itself, clearly planning each aspect is vital, and surprisingly simple. The following four steps will ensure that you not only hold an efficient meeting, you will also find exceptional value in it and recognise it as a fundamental and productive part of every single week.

Weekly Management Meetings

Step 1: Decide on who should be in the weekly management meetings

If you have less than 10 employees it is likely everyone should be in the meeting. When the company grows, it can be reduced to the managers of the various departments. This is the team that needs to understand and fortify where you want the company to go.  Without this clarity, it is nearly impossible for them to make the best day-to-day decisions on how to achieve the results you want from them. Many accountability issues stem from a lack of understanding rather than a low level of commitment.

Step 2 – Prepare for your weekly management meetings

You should have two key company documents and strategies in place: 

1. Your quarterly and yearly goals. You will need to know where you want the company to go before you can begin having effective weekly meetings.  These plans should include two key elements:

2.  The core financial numbers that often include revenue, gross profit and sometimes a more net profit type of number like EBIT (Earnings Before Interest and Tax).  Ideally, some KPIs (key performance indicators) can also be included but we don’t need to get too fancy out of the gate.  

3.  The critical projects the company needs to complete by the end of the quarter (or any 90-day cycle) to be able to hit the desired financial and strategic targets. Often in management books, these ‘projects’ are referred to as “Rocks” and we do the same in our management consulting practice. Rock identification and completion is a topic unto itself but for the purpose of this article, we will keep the concept to the identification of how the company can most practically improve over the next 90 days to best move it towards its desired outcomes (vision, mission, BHAG, 1-3 year goals, etc.).  

Step 3 – Have a practical company scorecard

Ultimately, you want to have a scorecard that monitors all relevant aspects of company performance but that often takes some time and effort to get right. Start with some basic numbers that offer an overarching projection of your company’s health. For example, your company revenue may seem like a valid number to track on your scorecard, but it is a ‘lagging indicator’. It doesn’t shed much light on how the company is performing this week because it requires invoice and/or money collection and demonstrates how the sales team was performing last month and your marketing the month before that. When you try to pick a few initial scorecard numbers to track it is often more effective to use more ‘leading indicators’ such as the number of proposals submitted or the number of new qualified opportunities for a projected period.  

Regardless of which numbers you pick, begin measuring and documenting something consistently. There is a very good reason great business people consistently say, “what gets measured gets managed.” When you don’t measure with practical numbers you have no objective measuring stick for providing performance feedback.  

Step 4 – Use a proven meeting formula

There is no reason to reinvent the wheel. Great weekly management meetings have the same attributes:

    1. They happen the same time every week.
    2. They start on time and end on time.
    3. They stay on topic and are not allowed to devolve into unfocused dialogue.
    4. They have a consistent agenda that includes:
      1. Starting on a note of gratitude or positivity.
      2. Review the week’s performance scorecard – regardless of how simple initially
      3. Share employee / team and customer headlines for the week
      4. Review the status of this quarter’s “Rocks” or projects.
      5. Review the To Do’s that were identified in the previous meeting(s) to ensure completion and accountability.
      6. Discuss the key issues, opportunities and topics that have come up over the previous week
      7. Rate the meeting on a scale of 1-5 on whether it provided value for the individuals attending and rating the meeting.
    5. At the end of each 90-day period, a day-long planning meeting is utilised to update the Goals and Rocks and have a longer session to unpack bigger opportunities and challenges facing the company.

In conclusion, weekly management meetings are often not seen as critical to a company’s success but this is due to a blind spot created by a history of negative meeting experiences. 

By following the four steps outlined above, any existing blindspot will quickly and permanently be removed creating a new opportunity for greater employee accountability and buy-in along with significantly higher company performance.  

Until next time, enjoy the process!

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Collaborative Accountability | Blind Spots Part Two

Collaborative Accountability

5 Common Blind Spots Leaders Have Are Not Seeing How To:

Company Planning Collaborative Accountability

The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time. Let’s take a look at the benefits of Collaborative Accountability.

Blind Spot #2 – Create Collaborative Accountability

This article focuses on the second of five blind spots many business owners have when trying to grow from five to 50 employees.  In our previous article, we discussed the first blind spot which was around not seeing the value of consistent company planning.

The second Blind Spot involves not seeing how to hold employees accountable in a collaborative way. The issue is often that the business owner doesn’t realise that employees are not performing to standard because they are not clear enough on what is expected of them, rather than simply not caring. Let’s look at how collaborative accountability can resolve this issue.

There are two areas employees are typically less than clear on. The first is the big picture of company vision and direction. Most employees are only provided feedback from a vantage point of their specific position and not at a company level. This makes it harder for the team member to understand the macro goals and objectives and it ends up being more difficult for them to adopt collaborative accountability and make decisions based upon the company’s greater good.

The second issue is that the team member’s seat, or position, isn’t clearly defined, making it challenging for the employee to fully understand what they are accountable for. This is often because the manager(s) have not taken the time or had the skills to clarify the employee’s seat in a clear and concise way. Rather, they have an organisational chart and a Position Description (PD) and expect the employee to infer the true meanings of how they need to perform beyond what is written down. This causes the manager to hold the team member accountable for tasks they weren’t even aware of.

It is the company’s obligation to share with all employees the company direction and do so consistently so that the strategies and ideas can sink in over time. They say you need to tell someone seven times before they get it; employees are no different, especially when talking about the goals and ambitions of someone else’s company.

Once you are clear with your employee about where the company is going and what their seat is accountable for, then you are ready to begin monitoring their progress. This is where the 1:1 review strategy and collaborative accountability become important. Although there are a number of different elements to a 1:1 review with a team member, the most important aspect is providing them with clear and consistent feedback on how they are performing as it relates to the company’s expectations. Most notably, how they are performing in relation to the company’s core values and the key deliverables for their particular seat. When these two components (core values and key deliverables) have been clearly defined and discussed in advance, providing high-quality 1:1 reviews will be straightforward.  

In conclusion, if you want to hold develop collaborative accountability in a productive way to ensure they are clear on where the company is going, what is expected of their performance and to provide clear ongoing feedback on how they are progressing. This clarity takes the emotion out of the process and is easy for all types of people to get behind. Collaborative accountability isn’t simply telling your staff members what is expected of them, it is actively collaborating with them to define the role as you both see it and are able to sustain.

If you are looking at how to become more clear with your employees on what you expect from them please review our posts on the accountability chart and the importance of company planning.  And as always, feel free to contact us with any questions we may be able to provide insights on directly.

Until next time, enjoy the process!

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