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Creating an Effective Business Operation System [Part 4]

Performance Monitoring

Performance Monitoring

Performance monitoring is critical for businesses of all sizes. It helps managers understand how well the organisation is performing against its goals and objectives. 

To reiterate on previous lessons, here are the reasons why performance matters and why it is essential to track and measure it consistently.

  1. Tracking performance helps you identify areas in which your business is doing well and where it needs improvement. By setting key performance indicators (KPIs), you can measure your progress towards your goals and identify any areas where you need to make changes. This allows you to focus your resources on the areas that will have the most significant impact on your business.
  2. Performance monitoring helps you identify and address issues early on. By regularly measuring your performance, you can quickly identify any problems and take corrective action before they escalate. This can help you avoid more significant issues down the line and ultimately save you time and money.
  3. Tracking performance can help you make more informed decisions. By having data to back up your decisions, you can make more confident and accurate choices. This is particularly important when making strategic decisions that can have a significant impact on your business’s future.
  4. Monitoring performance can help you stay competitive. By tracking your performance against your competitors, you can identify the areas in which you need to improve to stay ahead of your adversaries. This allows you to adjust your strategy and tactics to stay relevant and competitive in your industry.
  5. Lastly, monitoring performance can help you motivate your employees. By setting KPIs and regularly sharing performance data, you can help your employees understand how their work contributes to the overall success of the business. This can motivate them to work harder and perform better, leading to better overall results.

Performance monitoring is critical to the success of any business. By identifying the right KPIs and tracking performance consistently, you can identify areas where you need to improve and take corrective action early on. This can help you stay competitive, make more informed decisions, and ultimately, drive better results. Remember, what gets measured gets managed, so don’t neglect performance monitoring in your business.

Key Performance Indicators

KPIs are metrics used to evaluate the performance of a particular activity or process. They provide a clear picture of how well your business is doing and help you make informed decisions. Let’s take a closer look at some common KPIs for different departments in your business.

Marketing KPIs:

The goal of marketing is to increase brand awareness, generate leads, and ultimately, drive revenue. Therefore, marketing KPIs should focus on metrics that help you track the effectiveness of your marketing campaigns. Some common marketing KPIs include website traffic, lead conversion rates, cost per lead, and customer acquisition cost.

Sales KPIs:

The sales department is responsible for converting leads into paying customers. Sales KPIs should focus on metrics that help you track your sales pipeline and revenue generation. Some common sales KPIs include sales growth, conversion rates, average deal size, and customer lifetime value.

Service Delivery KPIs:

The service delivery department ensures customer satisfaction by delivering high-quality products or services. Service delivery KPIs should focus on metrics that help you measure the quality of your products or services and customer satisfaction. Some common service delivery KPIs include customer satisfaction rates, customer retention rates, service response times, and service level agreements.

Operations KPIs:

The operations department manages the smooth running of your business. Operations KPIs should focus on metrics that help you measure the efficiency of your operations and identify areas for improvement. Some common operations KPIs include inventory turnover, order fulfilment cycle time, quality control metrics, and on-time delivery rates.

Human Resources KPIs:

The human resources (HR) department manages the people in your business. HR KPIs should focus on metrics that help you track the effectiveness of your HR policies and practices. Some common HR KPIs include employee turnover rates, absenteeism rates, training and development metrics, and employee satisfaction rates.

Finance KPIs:

The finance department is responsible for managing your business’s finances. Finance KPIs should focus on metrics that help you track your financial health and identify potential areas of risk. Some common finance KPIs include revenue growth, profitability ratios, debt-to-equity ratio, and cash flow.

In addition to these department-specific KPIs, there are also some KPIs that are relevant to all businesses, regardless of the department. These include:

Customer Acquisition Cost (CAC):

This metric helps you understand how much it costs to acquire a new customer. By tracking this metric, you can identify areas where you can reduce your costs and improve the efficiency of your marketing campaigns.

Net Promoter Score (NPS):

I only use this measurement because it is a well known example. These days with VoC AI functionality exploding NPS is feeling more and more like a fairly crude strategy. None-the-less, NPS is a measure of customer loyalty and satisfaction. By tracking your NPS, you can identify areas where you need to improve your products or services and build a loyal customer base.

Customer Churn Rate:

Customer churn rate measures the rate at which customers stop doing business with you. By tracking this metric, you can identify areas where you need to improve customer retention and loyalty.

Employee Productivity:

Employee productivity measures the output of your employees. By tracking this metric, you can identify areas where you need to improve your business processes and optimise your workforce.

Although these are viable and frequently used KPIs, companies vary greatly in what they should be measuring. Thus, developing an effective scorecard often takes several iterations to finalise. Over time and constant use, further refinements will likely be identified with some small adjustments happening every year.

Monitoring KPIs is essential for every business. By tracking the right KPIs, you can gain valuable insights into your business’s performance, identify areas for improvement, and make informed decisions. Remember to choose KPIs that are relevant to your specific business outcomes.

How to Monitor

As you likely know, one of the best tools for monitoring your business activities is with a company performance scorecard. A scorecard is a visual representation of your business goals and KPIs. It provides a quick snapshot of how well you’re doing in each area of your business and highlights areas that may need attention.

Here are the steps to create an effective scorecard. You can download our infographic on how to create your company scorecard at the end of this blog:

STEP 1: Decide on the areas of the business you want to measure and what types of activities are most important to monitor.

Before you can create a scorecard, you need to define your business goals and KPIs. Refer to the KPIs we discussed above and identify which ones are most relevant to your business. These KPIs should align with your business goals and objectives.  .

STEP 2: Choose your specific measurement metrics, or ‘what’ you will measure to monitor your teams performance in a specific area of your business. The art will be in finding numbers that are both efficient to measure and effective at providing you feedback on whether something is working or has problems.

For example, if you want to monitor customer satisfaction, you could measure it using a Net Promoter Score (NPS) or in-person customer satisfaction surveys. NPS is an example of something quite efficient to measure with numerous third-party applications available.  However, it is quite crude in its ability to provide an informed overview on how the customer really feels about a company, thus not all that effective compared to other options. In-person customer satisfaction surveys will often generate far more value and insights from the customer feedback thus being highly effective. However, they can take a great amount of resources to conduct consistently over time, so aren’t particularly efficient.   

Obtaining an efficient and effective company scorecard can require some time to get right. It may take several tries and tweaks to get the balance between measuring real performance and the difficulty of getting the data into a weekly scorecard, but the effort will ultimately more than compensate your efforts.

STEP 3: Set targets for each item. Whenever possible the KPIs should be updated on a weekly reporting cycle because you will be reviewing the scorecard on a weekly basis. For example, if your objective is to sell $400,000/month, the scorecard KPI should be $100,000 to align with weekly reporting results. Although many activities and KPIs can be tracked weekly, other numbers may only be reported on or calculated monthly, such as Net Profit which requires you to aggregate a number of costs that only occur monthly.  

Step 4: Assign responsibility for each of the numbers. Make sure that each KPI has a clear owner who is responsible for monitoring and reporting on it. This will ensure that there is accountability and that KPIs are not overlooked. A pro tip is to assign a backup person in case the KPI owner does attend the weekly meeting.

STEP 5: One thing I have learned from helping companies implement the Great Game of Business or other incentive type programs is the value of forecasting. It is good to report on a ‘leading’ indicator. When appropriate, it is even better to include a forecasted number that pushes the performance owner to think about and share what is achievable by the end of the month – or even subsequent months.

I find this practice of forecasting numbers enhances the quality of conversations on how the company is performing in any particular area. It often highlights concerns or weaknesses that generally just remain in team member’s mind when forecasting isn’t used.

Step 6: Now that you have defined your goals, KPIs, metrics, and targets, it’s time to create your scorecard. Your scorecard should include each KPI with the metric you’re using to measure it, and your target for that KPI. You can create your scorecard using a simple spreadsheet like the one provided below or a more advanced dashboard software if appropriate.

Conclusion

Monitoring your business activities is critical to achieving your business goals. A scorecard is a powerful tool for tracking your KPIs and providing a visual representation of your progress and problem areas. Additionally, holding regular meetings and assigning responsibility can help you stay on top of your business activities and ensure that you’re on track to success. Thank you for watching, and we’ll see you in the next video.

And as always, if you have any questions on implementing this strategy don’t hesitate to contact us for some insights that have worked for other companies like yours.

Until next week, enjoy the process!

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Creating an Effective Business Operation System [Part 3]

Business Planning

Business Planning

Business planning is critical for success though it often is undervalued because it is rarely done consistently enough and with enough clarity and follow through.  

In part three of my series on clarifying your company strategy, we look at how business planning for short- mid- and long-term goals can be correctly implemented and make your projects both easier to accomplish and successful. To be clear, the planning we are talking about takes place every 90 days without exception. There is a clear process for sufficient reflection on the previous 90 days while the majority of the time is spent on planning for the next 90 days. 

Let’s reflect on why we should plan in the first place.

Why Implement Business Planning

Yes, you’ve heard this a million times but how would you currently rate the quality, consistency, clarity and accountability around your business planning efforts? Most of us know we should be planning more but because it isn’t as urgent as other daily or weekly activities it often gets pushed aside. So let’s begin by evaluating why you should plan when you are already extremely busy. 

Here are the top five reasons why it’s important to clearly plan and re-plan your objectives every 90 days:

  1. Keep Up With a Rapidly Changing Business Environment: The business world is dynamic and constantly evolving. As an evolving company, you need to keep up with these changes to stay competitive. By planning and re-planning your objectives every 90 days, you can adjust your strategies and goals to respond to the organic changes in the business environment.
  2. Ensure Alignment with Long-term Vision: While short-term business planning is essential, it is also important to ensure that the company’s goals are aligned with its long-term vision. By planning and re-planning your objectives every 90 days, you can ensure that your short-term goals remain aligned with your long-term vision.
  3. Measure Progress & Adjust Strategies: By setting short-term objectives, you can measure progress more frequently and adjust strategies accordingly. This helps to ensure that you are on track to achieve your long-term goals.
  4. Stay Focused & Motivated: Setting and achieving short-term objectives helps to keep the team focused and motivated. When you see progress towards your goals, it can inspire a sense of accomplishment and help to maintain momentum.
  5. Improve Communication & Collaboration: Planning and re-planning your objectives every 90 days can also improve communication and collaboration within the team. It provides an opportunity for team members to share their ideas and perspectives, and to align their efforts towards a common goal.

Growing companies need to clearly plan and re-plan their objectives every 90 days to keep up with a rapidly changing business environment, ensure alignment with long-term vision, measure progress, adjust strategies, stay focused and motivated, and improve communication and collaboration.

How to Plan

Many people I work with are happy to invest in the effort of business planning but they haven’t found a way to plan that feels both valuable and consistent. Planning is a critical aspect of business success, and in this blog, we will be exploring how to plan effectively and consistently. Let’s uncover why a business planning process is both simple and effective.

The planning process has three key steps: Prepare, Plan, and Retain. Each of these steps is essential to the success of the business planning process, and when executed correctly, can help ensure that your business stays on track and achieves its goals.

Step 1: Prepare

  • The first step in the business planning process is to prepare. This involves gathering all the necessary information and data to inform your planning. The first thing you need to do is revisit your business’s vision, strategy and goals documentation – the things we put into the Declarations and Enterprise Value Strategic Plan tabs of the BOS spreadsheet in last week’s blog.
  • It is important to point out that this content assumes you have already undertaken a significant amount of strategy planning and the likely challenge is how to not let the plan collect dust, ensure there is sufficient learning from past performance and the right adjustments are made for the upcoming period.  
  • If you don’t have much clarity on or belief in your company’s strategy details feel free to contact me to provide more support on this topic.  
  • The review should help you reinforce the details of what you wish to achieve in the short term and long term. Once you have re-primed your mind with a clear vision and goals, you need to identify the likely current critical success factors that will help you achieve them. These success factors or objectives don’t need to be fully clarified regarding key results and timelines but they should allow you to organise a list of likely topics for discussion during the next meeting.
  • The second part of the preparing process is asking each attendee to prepare three things for the meeting:
  • First, what is the biggest win for them or their team over the past 90 days? It is easy to forget all the things we are accomplishing as we go after the prospective objectives. This pushes team members to identify meaningful wins and share them with the rest of the team.
  • The second thing is to identify what isn’t working well enough or is a significant bottleneck for their team or the company. We want people to really think about this and feel responsible to contribute meaningful ideas for the meeting. We ask for these ideas in advance of the meeting in order to add their ideas to the quarterly meeting spreadsheet.  
  • The third thing we ask of all attendees is to identify what they want to achieve in the meeting. They are going to be spending nearly a day of their time at this meeting and we want to be sure we know what they want to take away. Sometimes the desires are as simple as to clarify and update their and the company’s goals and objectives. Other times it is to be sure a specific issue is addressed with a clear plan of action as an outcome. Regardless, it is always good to encourage people to think about what they want in advance rather than just showing up without determining whether they got what they most needed from the meeting.

When the company’s strategic information has been reviewed and brought to attention and the attendees have contributed their points, you are now ready to have a productive meeting.

Step 2: Your Business Planning Meeting 

Although some companies may choose to have a slightly longer annual planning meeting, most business planning meetings are quarterly meetings so we will focus on that in this program.

The agenda for the business planning meeting can obviously vary from company to company and meeting to meeting. However, the basic premise should remain roughly the same. Here is the core agenda for most quarterly meetings:

It begins by clarifying what is and isn’t working within the company, along with the desired outcomes for the meeting. This helps to define the core themes for the meeting. My favourite is the early list and discussions on what are some of the current bottlenecks within the business.  

The next agenda item is to review the previous quarter’s numbers and rocks, or objectives. Just having experience with a skill set or trying to obtain something doesn’t create any meaningful value or likelihood of improvement over time. Only when you add reflection into the process do you create the space to observe, contemplate and make any required adjustments. This is our time to reflect on the past performance.

This is done in two fundamental ways: First is reviewing some type of financial reports and the 90 days of the company scorecard. Discussing what worked and what didn’t helps sharpen the focus on the issues and opportunities that we will want to focus upon in greater detail later in the meeting.

The second part of the reflection process is to assess the results of the rocks, objectives or projects for the quarter. In doing so we look at four questions and have the owner of the project submit their information so we can review them together. The questions are:

    1. What was the completion definition?
    2. What was the actual result?
    3. Are the outstanding action items on track?
    4. Are there any lessons learned?

The owner also has an open invitation to share any supporting documentation they’d like to cover during the review process.

The third item of the agenda is to review and remember what the company stands for and what the basic strategy is to achieve its goals.

The fourth agenda item is to identify the core objectives for the upcoming 90 days. This list of objectives is not finalised but gets to the point where it seems like they are addressing the key deliverables, opportunities and issues the company needs to address in the short term.  

The next agenda item is to identify the challenges that are likely standing in the way of achieving the objectives.  This is often the biggest chunk of time in the entire meeting.  This is the time of the quarter when you have the right people unpacking the most important issues with a sufficient amount of time and space to get down to the nub of issues and define a clear solution strategy to resolve the issue fully.  

The next to last agenda item of the meeting is to revisit the list of goals, objectives and/or rocks for the upcoming quarter, see if anything needs to be adjusted as a result of the issues discussed and to assign ownership to the items along with a “completion definition” in order that everyone is clear on what specifically is expected to be accomplished.  

The final agenda item of a quarterly meeting is to review the tasks that have come from the meeting and for all the participants to rate the quality and productivity of the meeting. Like with all activities in business, there should always be a desire to identify ways to improve – even quarterly meetings! 

Step 3: Affirming the Process

This retention of information and objectives shows up in the weekly meetings and will continue throughout the subsequent 90 days.

How this is done will be covered in my upcoming blog on weekly meetings.

By following the Prepare, Plan, Retain process, you can ensure that your business stays on track and achieves its goals. Remember to gather all the necessary information and data, develop a detailed plan of action, and monitor progress regularly. With these steps in place, you can take your business to the next level.

How to Plan Consistently

The importance of planning consistently cannot be understated. 

Business Planning is a critical element of success, but it’s not always easy to be consistent with it. Consistency is key because planning isn’t a one-time event. It’s an ongoing process that requires regular attention and revision. Here are some strategies that you can use to plan consistently:

  1. Set aside a specific time each quarter for planning

One of the easiest ways to plan consistently is to make it a habit. Set aside a specific time every 90 days for a quarterly meeting and stick to it. Make it a non-negotiable appointment.  

  1. Use the BOS Quarterly Meeting Cheat Sheet

The sheet, the final tape of your Business Operation Spreadsheet, provides you with a basic agenda and all of the different items that need to be documented and discussed.  It will both help you be organised for the meeting and retain the information within the spreadsheet for quick reference.

  1. Hold yourself accountable

Accountability is essential when it comes to planning consistently. Find an accountability partner who can hold you accountable and help you stay on track. If you like the idea of having someone else facilitate this process so you can r focus on the content of the meeting, please reach out to us to see how we can support business leaders in this way.

Consistent business planning is critical to achieving your goals. By setting aside a specific time for planning, using a planner or business planning software, breaking down your goals into smaller tasks, holding yourself accountable, and celebrating your successes, you can create a habit of planning consistently.

Remember, business planning is not a one-time event. It’s an ongoing process that requires regular attention and revision. Consistent planning will help you stay on track and achieve your business goals.

Module Support Material 

Clarify the effectiveness of your current business planning strategy by answering the following simple questions:

Engagement Exercise – 5-Question Quiz

  1. Do you invest one day every quarter to planning with your management team?
  2. Do you have a clear process for working through the quarterly planning process?
  3. Does your team rate the quality of the meetings as high?
  4. Do you review the key aspects of the previous quarter’s performance during the meeting?
  5. Is the majority of time spent on discussing and resolving the main issues and opportunities for the company?
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Creating an Effective Business Operation System [Part 2]

Management Pillars & Disciplines

Welcome to module two of my seven-part series on Business Operation Strategy (BOS). This module will give you an overview of what you can expect to gain from this training program. I will introduce you to the five pillars of BOS to develop company planning, valuable management meetings, effective performance monitoring, a compelling people management strategy, and clearly-defined processes.

Each of the five pillars is essential to run and scale a successful business, and we will cover each one in detail in the upcoming modules. Understanding and implementing each pillar in your business will help you more predictably achieve your goals, increase your profits, and grow your company.

The Five Pillars

Let’s start with Pillar One: the right amount of company planning. Planning is critical to the success of any business, and without it, a business can’t achieve its goals. However, too much planning can lead to analysis paralysis, where a business spends too much time planning and not enough time executing.

In this pillar, we will teach you how to strike a balance between planning and execution, and how to create an effective plan that is achievable. You will learn how to set 90-day goals or objectives, ensure there is sufficient clarity of the vision for your business, and develop a strategy to achieve your objectives.

Moving on to Pillar Two: valuable management meetings. Management meetings are crucial to ensure everyone in the company is aligned with the goals and objectives of the business. However, meetings can be a waste of time if they are not productive and efficient.

In this pillar, we will show you how to conduct productive meetings that lead to action and results. You will learn how to prepare for meetings, set agendas, manage time effectively, and follow-up on action items to maximise accountability..

Pillar Three is effective performance monitoring. To run a successful business, you need to monitor your performance continually. Without performance monitoring, you won’t know if you are achieving your goals, and you won’t be able to make informed decisions to improve your business.

In this pillar, we will help you understand how to best set up Key Performance Indicators (KPIs) and how to track and monitor your business’s performance. You will learn how to create, or improve, a dashboard to monitor your KPIs, identify areas that need improvement, and make data-driven decisions to improve your business.

In Pillar Four we focus on a compelling people management strategy. Your people are the most valuable asset in your business, and managing them effectively is crucial to your success. In this pillar, we will show you how to create compelling, yet manageable, people management strategies that attract and retain your most valuable talents.

You will learn how to define or further clarify your company’s core values, create an accountability chart, and conduct effective ongoing check-ins with your team members. You will also learn how to develop a career development plan for your team members and provide regular feedback to help them grow and succeed.

Finally, Pillar Five highlights creating clearly defined processes. Documenting your business processes is vital to ensuring that everyone in your business is on the same page and working efficiently. In this pillar, we will teach you how to document your core business processes, how to identify the most important processes to document, and how to create a process documentation plan for your business.

To reiterate this module, understand that the five pillars of a management framework – planning, people management, processes, weekly execution meetings and performance monitoring – provide not only a simple framework but also a comprehensive business operating system to achieve your business objectives. By adhering to these pillars and disciplines, your business can improve communication, decision-making, accountability, and performance which in turn leads to more predictable long-term success. 

Implementing this BOS will ensure that every aspect of your company is working together towards the same clear goals and rowing in the same direction.

Managing Your Pillars

We will now demonstrate how all five pillars of your Business Operating System (BOS) are managed and evolved over time from a single spreadsheet. To stay on top of your business, it is important to access information quickly and in a context that helps you remember why actions were taken and what needs to happen next.

We will walk through the tabs as we work through them in this training series. Let’s begin with the pillar and discipline of planning. We have multiple tabs for company planning because there are a few component parts.

Tab One: Company Declarations

These are the data points that the company declares to be true, and we use the term “declaration” for this information because we want company founders and their teams to stand for something. Whether it is the company vision, mission, or values, it is important that the team draws a line in the sand and declares who they are, where they are going, and at a high level, how they will get there. This often includes a big hairy audacious goal or BHAG, although not all companies use this strategy, Jim Collins pointed out in his book Good to Great that most of the successful companies he researched used BEHAGs to focus and motivate their teams.  

But like most things in the BOS process, it is at your discretion for what resonates with your team. Regardless of what specific declarations are used, we consistently find it helpful to have this information readily available during weekly and quarterly meetings.

Tab Two: Enterprise Value & Strategic Planning

This is where we capture and align the financial ambitions of the company with its ability to generate sufficient value to be able to accomplish such monetary numbers. How this gets unpacked varies significantly, but it typically starts with a fluid mind map that makes visible the various strategies and company improvements that need to occur within given time frames.

Tab Three: The 1-Year Plan

From the higher-level strategic planning in the previous tabs, we now come to a more detailed 1-year plan that has both the objectives for the year as well as the next 90-day focus that comes from the most recent quarterly meeting. We consistently refer back to this tab when making decisions in meetings.

Tab Four: Managing Quarterly Rocks or Projects

These are the Objectives or Rocks that were identified in the previous quarterly meeting that need to be completed within this 90-day cycle. Some people refer to them as Objectives, others refer to them as Rocks, while others refer to them as Goals or Projects. Call them what resonates with you, but most importantly, this is the place where we monitor the most important strategic projects that need to be accomplished by the end of the quarter.

Tab Five: Quarterly Meetings

We keep this accessible in case we need to revisit why something was actioned or what the outcome of a conversion was. Depending on your industry, this information, along with what you will see in your weekly meeting tabs, can also support various types of quality assurance audits and documentation.

Tabs Six-Eight: Weekly Meetings

These three tabs demonstrate three different states of weekly meetings – last week’s, current week’s, and upcoming week’s.  We will go into the details of weekly meetings in that module.

To summarise, the big takeaway from even this quick overview is that we don’t forget what we said we would do and we consistently monitor and quickly address performance issues as a team.  

The bottom line is that the weekly meeting becomes the most important time of the week for all participants.

Tab Nine: Company Scorecard

This is part of the weekly meeting agenda. Each owner of the particular topic is responsible for inputting and calling out their numbers, ensuring the target is achieved week over week. You will hear more about developing and using a company scorecard in the specific monitoring module, but this is where it resides in your Better Operating System.

Tab Ten: Issues Resolution

Next, you will find an Issues Resolution tab. This is used when we come across a problem or opportunity that cannot be effectively solved for within a basic task. Often, multiple steps are required, involving multiple people. We use this tab to manage those more complicated solution strategies.

Tabs 11-14: The Accountability Chart, People Review Form, & Process Documentation

These are additional tabs for the Accountability Chart, People Review Form, and Process documentation. It is sufficient to simply point out where you can find these. They will make more sense when we cover them in the upcoming modules.

That said, you have now seen every core part of the BOS model. Although more insights will come when we get more into specific strategies for each pillar or discipline, most leaders at this point are already feeling like this is something they don’t currently have and will make things easier when trying to stay on top of all the activities and information required to effectively run a growing organisation.

It won’t take long to have your company’s information, strategies, and execution efforts flowing through your personalised BOS spreadsheet. Get excited. Let’s get this embedded into your company’s operations!

Module Support Material 

To ensure that this process is firmly embedded, complete this short quiz, referring back to the information above if in doubt:

Engagement Exercise – 5-Question Quiz

Question #1 – What don’t they teach you in business school?

  1. How to raise capital
  2. A simple framework to run your entire business
  3. How to write a business plan
  4. How to review business case studies

Question #2 – What are the 5 Pillars of a Business Operating System?

  1. Planning, People, Processes, Meetings, and Monitoring
  2. Strategy, People, Meetings, Money, Modernization
  3. Planning, Meetings, Objectives, Team, Values
  4. Values, Vision, Strategy, Team, Finances

Question #3 – Are the 5 attributes of the BOS framework Pillars or Disciplines?

  1. Pillars – they are the fundamental parts of an effective business management framework
  2. Disciplines – they are skill sets that require ongoing attention and development.
  3. Both, the five attributes provide a clear framework for remembering what needs to be done well and consistently to successfully operate a business.
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Creating an Effective Business Operating System [Part 1]

Creating an effective business operating system (BOS) is an imperative foundation of any company, but it is something that is often overlooked or misconstrued.

Over the next seven weeks, I will be taking you through every step required to ensure that your BOS is optimised to fulfil its greatest potential. But what exactly does this mean?

A well-honed BOS will benefit your business in numerous ways:

  • It ensures that each staff member is working to their best potential
  • It refines cash flow, ensuring greater cost efficiency across your business
  • It will create a stronger, more cohesive management team
  • It will align your business objectives, ensuring that every staff member is working towards the same business goals in synchronicity.

This program outlines the key stages in identifying, implementing, disseminating and refining your Business Operating System in a way that is accessible and manageable.

Though aspects of these modules may sound familiar, they will be presented concisely, to provide for you a simple and visible operating system to manage all aspects of your company through.  

Most of us can benefit greatly from identifying and internalising a framework or Operating System for organising our company management and execution disciplines in a way that feels both retainable and manageable; one that frees you up to play off your strengths in the pursuit of your objectives. 

It is also important to point out that in any business the end goal is to achieve defined objectives. The specific objectives will obviously vary greatly and what you specifically want to achieve is not the focus of these modules. The focus is to give you a more effective operating system with which to achieve your objectives.

Let me ask you this: when was the last time you felt overwhelmed or anxious dealing with all the moving parts of running your business? It’s like trying to keep five heavy plates up in the air at one time – and for a long time!

And if you look for help you can certainly find it. There are thousands of business books published every year on countless topics. So our challenge is not a lack of information or strategies – it is more about actually being able to execute or implement strategies we already know we should be leveraging.

Business Operating Strategy

The aim of these modules is to provide you with an effective model for managing all parts of your business – we call this your Business Operating System of BOS for short.   

Your specific BOS will allow you to see the management playing field as a whole and select specific parts of your company to focus on while not losing attention on all of the operating requirements.  

Moreover, it will show you how to execute or implement initiatives in an iterative way so you can select of work that are obtainable rather than biting off more than you can chew and experiencing yet overwhelm and another failed implementation effort.

That said, here are the Module Objectives:

1) Provide you with a strategy to generate better execution results (get more done in a shorter amount of time)  

2) Develop a stronger team (a team who understands, is universally motivated, and has the ability to do the required work)

3) Create a More Valuable Company by being able to demonstrate a proven framework for strong ongoing company performance.

OK, let’s start creating these results! Be sure to complete this quick five-question survey on how you currently rate your company’s five management disciplines:

Rate Your Company’s Current 5 Management Disciplines:

  1. What is the strength of your company’s planning discipline? How is past performance reviewed and what specific updates are made to execute plans? How often are these reviews conducted?
  2. How well can you determine that you have the right people in the company? Can you provide examples of how you ensure they are clear on their accountabilities?
  3. How strong are the structure and content of your weekly management meetings? How well do they contribute to overall company performance?
  4. How well do you currently measure company and team performance? What specific metrics are used, and how are they tracked and reported? How are forecasting components incorporated into these metrics?
  5. How well are performance standards defined and communicated within the company? How do you ensure that employees are trained and managed effectively in these standards? Can you provide examples of how this has been successful in improving performance?

I will be sharing each module over the coming weeks, so make sure you check back in to continue your journey to an effective Business Operating System.

Until next week, enjoy the process!

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A Consistent Approach to Clarifying Business Strategy [Part 2]

Business Strategy

In last week’s blog we explored the three principle steps to creating an effective business strategy.

This provided the groundwork for the next stage: implementing productive strategies that will create consistency, security and productivity for years to come.

Without the information we gathered in the first blog of this series, this week’s steps will be based on guesswork and false projections, a vague estimation of your company position that will lead to an ineffective business strategy that is unable to fulfil its purpose.

It is essential that these first three steps are completed in order to progress towards an effective, resilient business strategy that will serve you well. If you didn’t read last week’s blog, or you’d like a reminder of steps one to three, click here to take a look over stage one.

If you have already identified the metrics outlined in the first three steps, download my Business Strategy Analysis form and let’s plunge into the next four steps of creating a compelling and productive business strategy:

Step 4  Identify Business Strategy Options:

  • What are the potential strategic options available to the company?
    • To identify strategic options, it’s important to first assess the company’s strengths, weaknesses, opportunities, and threats, as outlined last week. Once these factors have been considered, we can work with our client to identify a range of strategic options that align with the company’s vision, mission, and values, and that capitalise on its strengths and opportunities while mitigating its weaknesses and threats.
  • What are the benefits and risks associated with each option?
    • Once a range of strategic options has been identified, it’s important to evaluate the risks and benefits of each option. This may involve analysing the potential impact on the company’s financial performance, market position, brand reputation, and customer base, as well as the potential risks associated with each option, such as changes in market demand, regulatory or legal issues, or competitive pressures. By weighing the risks and benefits of each option, we can help our client to make a more informed decision about which strategy to pursue.
  • Which options are most aligned with the company’s vision, mission, and values?
    • It’s also important to consider the short- and long-term implications of each strategic option. This may involve assessing the impact on the company’s financial performance, market position, brand reputation, and customer base, as well as the potential for future growth and innovation. It may also be important to consider the cultural and organisational changes that may be required to implement each strategy, as well as the potential impact on employees and other stakeholders.
  • How can the company mitigate risks and capitalise on opportunities?
    • Once the risks and benefits of each strategic option have been identified, it’s important to develop a plan for mitigating risks and capitalising on opportunities. This may involve developing contingency plans for potential risks, such as changes in market demand or regulatory issues, as well as identifying potential partnerships, acquisitions, or other growth opportunities that may be available to the company. It may also involve developing new products or services, investing in research and development, or building a more agile and responsive organisational culture.

By answering these questions and identifying strategic options, we can assist our client in developing a more effective strategy that takes into account the company’s strengths, weaknesses, opportunities, and threats, and that is aligned with the company’s vision, mission, and values. This can help the company position itself for future growth and success in a rapidly changing market.

Step 5  Evaluate Options & Choose a Business Strategy:

  • What are the key criteria for evaluating the strategic options?
    • To evaluate options and choose a strategy, it’s important to first establish criteria for evaluation. This may involve considering factors such as financial performance, market position, customer satisfaction, organisational culture, and stakeholder value. It’s important to establish clear and specific criteria for evaluation that align with the company’s vision, mission, and values, and that take into account the company’s strengths, weaknesses, opportunities, and threats.
  • How does each option perform against these criteria?
    • Once the criteria for evaluation have been established, it’s important to assess how each strategic option compares against those criteria. This may involve developing a scorecard or other evaluation tool to compare the options side by side. The consultant can work with the client to assess the potential impact of each option on the company’s financial performance, market position, customer base, organisational culture, and stakeholder value, and to identify any potential risks or challenges associated with each option.
  • Which option is the best fit for the company’s goals, strengths, and resources?
    • It’s also important to consider the trade-offs associated with each strategic option. This may involve weighing the potential risks and benefits against the company’s current capabilities and resources, as well as the potential impact on the company’s brand reputation, customer base, and stakeholder value. It may also involve assessing the potential impact on the company’s organisational culture and structure, and identifying any necessary changes that may need to be made to implement the chosen strategy.
  • What is the recommended strategy?
    • Based on the evaluation criteria, the comparison of options, and the assessment of trade-offs, we can make an informed recommendation for the company’s strategy. It’s important to communicate the rationale behind the recommended strategy, as well as the potential risks and benefits associated with that strategy. In this way, we can work with our client to develop a detailed implementation plan for the recommended strategy, including specific milestones, timelines, and resource requirements.

By answering these questions and evaluating options, we can help our client choose a strategy that is aligned with the company’s vision, mission, and values, and that takes into account the company’s strengths, weaknesses, opportunities, and threats. This can help the company position itself for future growth and success in a rapidly changing market.

Step 6  Develop an Action Plan:

  • Identify the goals and objectives of the action plan:
    • The first step in developing an action plan is to identify the specific goals and objectives that the plan is intended to achieve. These goals should be specific, measurable, achievable, relevant, and time-bound (SMART). The consultant can work with the client to ensure that the goals are aligned with the company’s overall strategy and vision, and that they are realistic and achievable.
  • Identify the key initiatives and activities needed to achieve the goals:
    • Once the goals and objectives have been identified, we are able to work with our client to identify the key initiatives and activities that are needed to achieve those goals. These may include product development, marketing and sales activities, operational improvements, organisational changes, and other initiatives that are critical to achieving the desired outcomes. It’s important to identify the resources, timelines, and responsibilities associated with each initiative or activity, and to develop a detailed plan for execution.
  • Develop a detailed timeline and budget for the action plan:
    • Working alongside our client we can then develop a detailed timeline for the action plan, outlining the key milestones and deadlines associated with each initiative or activity. It’s important to ensure that the timeline is realistic and achievable, and that it takes into account any potential risks or challenges that may arise during the execution of the plan. In addition, it is necessary to develop a budget for the action plan, identifying the resources and costs associated with each initiative or activity.
  • Establish a monitoring and evaluation framework:
    • Finally, it’s important to establish a monitoring and evaluation framework to track progress towards the goals and objectives of the action plan. This may involve developing key performance indicators (KPIs) and other metrics to measure the success of each initiative or activity, as well as establishing a system for regular reporting and feedback. It is essential to establish a system for ongoing monitoring and evaluation, and to make adjustments to the action plan as needed based on the results of that monitoring.

Step 7  Monitor & Adjust the Business Strategy:

  • What metrics will be used to measure the success of the strategy?
    • The first step in monitoring and adjusting the strategy is to establish a set of performance metrics and key performance indicators (KPIs) that can be used to track progress towards the company’s goals and objectives. These metrics should be tied to specific outcomes and should be measurable, so that progress can be tracked over time. With our guidance clients can identify the most important metrics and KPIs for their business, and establish a system for tracking and reporting on those metrics.
  • How will progress be tracked?
    • Once the metrics and KPIs have been established, it’s important to regularly review performance and identify areas in which the company is lacking or falling short of its goals and objectives. The consultant can work with the client to establish a regular review process, which may involve monthly or quarterly performance reviews, and can help identify areas for improvement and opportunities to make adjustments to the strategy.
  • When and how will the business strategy be adjusted if necessary?
    • Based on the results of these performance reviews, the next step is to evaluate the effectiveness of the company’s strategy and identify opportunities to make adjustments. This may involve revisiting the company’s vision, mission statement, and values, as well as the strategic options that were identified during the strategy development process in Step 6. Assessing the risks and benefits of different strategic options, businesses can then develop a revised action plan as needed.
  • Communicate the results and adjustments to key stakeholders:
    • Finally, it’s important to communicate the results of the performance reviews and any adjustments to the strategy to key stakeholders within the company, including senior leadership, managers, and employees. This can help ensure that everyone is aligned around the company’s goals and objectives, and can help to more rapidly identify any changes that need to be made. Developing a communication plan ensures that all stakeholders are informed and engaged throughout the process.

By following these steps, you will be able to regularly monitor and adjust your strategy, ensuring that you stay on track to achieve your goals and objectives over time. This can help ensure that the company remains competitive in the marketplace, and can help you to adapt to the continually changing market conditions and customer needs as they arise.

By following the seven steps outlined in this blog series, business leaders will be able to develop a comprehensive, actionable, and effective strategy that will position the company for long-term success.

But simply following these steps isn’t enough to guarantee that success. By downloading my FREE Business Strategy Analysis plan, you will be able to quickly and readily refer back to it, ensuring that each component is not only still being implemented but that it is still relevant.

It may take some initial work to complete thee seven steps, but once in place, a one-hour monthly meeting with key staff members should be enough to identify weak links and resolve any shortcomings, issues or required updates to the business strategy.

I hope that this will enable you to gain a stronger perspective of your company’s health and the essential business strategy needed to ensure your ongoing success. 

As always, enjoy the process!

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A Consistent Approach to Clarifying Company Strategy [Part 1]

Company Strategy

Developing and maintaining an effective company strategy typically involves a number of steps and questions.  

These can vary greatly depending on the level of clarity a company has with their current strategy. When a company first launches, it is likely that both clarity and strategy are yet to be established or fully developed. When we encounter such businesses, we coach them through implementing a seven-step strategy that will provide clarity of their business model and a foundational structure from which to grow successfully.

In the first of our two-part series, we share the first three of these steps, working on the more fundamental aspects of your company strategy. Next week, we will delve into the remaining four steps, focussing on the ongoing strategies to maintain a healthy, effective business. We will also be sharing a downloadable Company Strategy Analysis for you to complete, featuring each of the steps required for you to develop greater clarity consistent, strong protocols within your business.

Step 1  Establish the Current State of Your Company:

  • What is the company’s current market position?
    • To understand the current market position of the company, it’s important to analyse its performance in relation to its competitors. This includes analysing the company’s market share, revenue growth rate, and profitability, as well as identifying its key competitors and their market positions. A market analysis may also involve conducting surveys or focus groups to better understand the company’s target audience and their perception of the company.
  • What is the company’s financial situation?
    • Analysing the company’s financial situation involves assessing its financial performance, including revenue, expenses, profitability, and cash flow. This may also involve analysing the company’s financial ratios, such as its liquidity, solvency, and profitability ratios, to gain a better understanding of its financial health. Additionally, it may be important to evaluate the company’s balance sheet and income statement to identify any areas of concern or opportunities for improvement.
  • What are the strengths and weaknesses of the company?
    • To calculate the company’s strengths and weaknesses, it’s important to conduct a SWOT analysis (strengths, weaknesses, opportunities, and threats). This involves recognising the internal strengths and weaknesses of the company, such as its resources, capabilities, and organisational culture, as well as the external opportunities and threats facing the company, such as changes in the market, new competitors, or shifts in consumer behaviour.
  • What are the opportunities and threats facing the company?
    • To discover the opportunities and threats facing the company, one must conduct a thorough analysis of the market and competitive landscape. This may include analysing market trends, customer behaviour, and changes in technology or regulations that may impact the company’s operations in the near future. Additionally, it may be prudent to assess the impact of potential economic, political, or environmental risks that may affect the company’s performance.

By answering these questions and conducting a thorough analysis of the company’s current state, we can help our clients gain a clearer understanding of their company’s strengths, weaknesses and opportunities, and develop a more effective company strategy that takes into account the business’s unique position in the market.

Step 2  Define the Company’s Vision, Mission, & Values:

  • What is the company’s long-term vision for the future?
    • Defining the company’s long-term vision involves clarifying where the company wants to be in the future, usually within the next 5-10 years. This vision should be both aspirational and inspirational, outlining the company’s ultimate goal or purpose. It should also be aligned with the company’s values and mission, as well as the needs of its customers and stakeholders.
  • What is the company’s mission statement?
    • A mission statement outlines the purpose and scope of the company’s activities, including its products or services, target audience, and overall value proposition. A well-crafted mission statement should be clear, concise, and inspiring, and should align with the company’s vision and values. It should also communicate to customers and stakeholders what the company stands for and what it hopes to achieve.
  • What are the company’s core values and beliefs?
    • Core values and beliefs are the fundamental principles that guide the company’s actions and decisions from within. These values should be aligned with the company’s mission and vision and should be reflected in the company’s culture, policies, and practices. Core values may include things like honesty, transparency, customer focus, innovation, teamwork, and social responsibility, among others.
  • How will the company’s vision, mission and values be communicated and implemented in the organisation?
    • Once the company’s vision, mission and values have been defined, it’s important to ensure that they are effectively communicated and implemented throughout the organisation. This may involve creating a company-wide communication plan that outlines how these principles will be shared with employees, customers, and other stakeholders. It may also involve implementing policies and practices that support the company’s values, such as employee training programs or community outreach initiatives.

By answering these questions and defining the company’s vision, mission, and values, we are in a more informed position to be able to help business owners and managers establish a clear direction for the company and ensure that all stakeholders are aligned around a common purpose. This can also help guide decision-making and ensure that the company’s actions are consistent with its values and goals.

Step 3  Conduct a Market Analysis:

  • What is the size and growth rate of the market?
    • To conduct a market analysis, it’s important to first identify the company’s target customers. This may involve analysing demographic data, such as age, gender, income, education, and geographic location, as well as psychographic data, such as values, interests, and lifestyle. It’s also important to clarify the needs and preferences of the target customers, as well as any barriers that exist in converting them to existing and loyal customers.
  • Who are the competitors in the market?
    • Analysing the company’s competitors involves recognising direct and indirect competitors in the market, as well as their strengths and weaknesses. This may involve conducting a competitive analysis that includes factors such as product offerings, pricing strategies, marketing tactics, and distribution channels. It may also be important to analyse the market share and market position of each competitor to identify opportunities and threats in the market. This can also be an incredibly valuable activity in assessing where the company may improve, or generating fresh product and marketing ideas to better compete with business adversaries.
  • What are the trends and changes affecting the market?
    • Analysing the market trends and drivers involves highlighting factors that may impact the company’s performance in the market. This may include macroeconomic trends, such as changes in consumer behaviour or technological advancements, as well as microeconomic factors, such as changes in industry regulations or market saturation. Understanding the market trends and drivers can help the company anticipate changes in the market and position itself for success.
  • What are the opportunities and threats in the market?
    • To identify the opportunities and threats in the market, it’s important to conduct a thorough analysis of the market and competitive landscape. This may involve analysing market trends, customer behaviour, and changes in technology or regulations that may impact the company’s operations. Additionally, it may be important to assess the impact of potential economic, political, or environmental risks that may affect the company’s performance.

By answering these questions and conducting a thorough market analysis, we can help the client gain a better understanding of the market and competitive landscape, identify opportunities and threats, and develop a more effective strategy that takes into account the needs and preferences of its target customers and the dynamics of the market.

These three steps will establish your company’s baseline, providing the building blocks for your company strategy. 

Next week will take the next step, analysing the systems that will help you navigate your ongoing company strategy. Implementing these steps provides the framework for business health and growth.

And don’t forget to tune in next week to receive your FREE Company Strategy Analysis download.

Until next week, enjoy the process!

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Three Key Ways to Decrease Work Stress

Work Stress

Last week we outlined three key areas in which work stress can arise.

Cash insecurities, team performance and an accumulation of random problems can all add towards elevating work stress, eventually impacting your capabilities, your personal life and your physical and mental health. From there, we explored real-life scenarios in which our clients had rectified these work stress triggers, removing their own issues and creating a far more balanced workflow.

It’s all well and good to hear about the negative effects of stress and a few scenarios where people were able to decrease some of the work stress creators in their lives, but what can you do today to begin getting your chronic stress triggers under control?

Three Strategies for Removing Work Stress

Get Clear on Your Money

Understand it takes less time to keep your cash clear than it does to manage the stress and problems that stem from flying financially blind. 

If you don’t have a basic budget, create one immediately. If you have an accountant available for the task, utilise them. If not, ask Google! Ignorance on how to do things is not a valid excuse. 

Clarify the flow of money going in and out of your business each month. Then work on creating a forecast for what your revenues should be over the next 3-12 months, depending on your business type. The longer it takes you to recognise revenue the longer your time horizon should be. 

Lastly, review the information often. Identify the weak links you find in obtaining a strong revenue base and work towards strengthening them. Then sit back and congratulate yourself on moving from a reactive to proactive state in one of the most important areas of your business and alleviating a heap of work stress.

Improve Your Team’s Clarity on How to Help

If you are paying someone to help you grow the profitability of your business, you owe it to yourself and them to be crystal clear on what you expect from them. 

Start with your most valuable and strategic team members. Ask yourself whether what they bring to the business justifies the cost to the company. Then ensure that they have clarity around their specific role and the responsibilities it has. 

Question #1 – what is the position accountable for delivering (and be specific)? Question #2 – how will everyone know the person in the position is delivering on what they are accountable for? These should be KPIs or KPRs. 

Review these points of clarification with the staff member and get their feedback. Once you reach an agreement on what is required of the position, ask yourself whether the person in the role:

      1. Understands the position
      2. Is motivated by the position
      3. Has the required skills to be successful.

If any of the answers are negative, you will need to do more work on either training them, moving them to another seat, or moving them out of your company. Regardless of which path is required, it is far better than not receiving are paying for.

Create a Weekly Management Meeting 

If you don’t set a time each week where you can identify, discuss and resolve key issues facing your company you are guaranteed to have chronic levels of work stress. This is likely to have negative effects on your health and overall quality of life. 

Most business leaders meet with their team once a week. Ensure a key component of each meeting is to discuss issues – usually the last agenda item of the meeting. Then break the discussion into three steps:

Step 1 – Identify the issues or concerns people see within the company. This could be with customers, employees, processes, technology, safety, productions, etc. When people bring up an issue, don’t settle for the initial problem description. Define precisely what the problem is. Rarely does the first description do so.

Step 2 – Once the core problem has been identified, invite the team to add their insights for how they see the problem occurring and ideas for solving it. Most of this should focus on ‘what’ the problem is rather than on ‘how’ to fix it.

Step 3 – Identify a solution that has clear owners for each of the required activities and set defined deadlines. Be sure these tasks are reviewed at the following meeting to ensure the issues remain visible until they are fully resolved.

By implementing one to all three of these strategies we have little doubt you will both reduce your amount of chronic work stress but also see an improvement in your profitability and team morale. Your business should be a tool to improve the quality of your life – not rob you of your health and vitality. Like any powerful tool, if not used correctly it can be highly destructive. Take some quick initial steps toward improving how you manage your company and it won’t take long to begin feeling the health benefits that will come from it. 

Enjoy the process!

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Chronic Stress: Its Affects & the Solutions

Chronic Stress

Many say ‘Stress is a killer.’ This is only partially true. 

Short-lived jolts of stress – known as Acute Stress – are perfectly normal and are actually beneficial. Chronic Stress, on the other hand, can be a major problem. This is where the body doesn’t have the opportunity to go through the recovery process, remaining in a state of stress for a longer period, causing harm to your body and quality of life in many different ways.

Below is a good reminder by McKinsey & Co on how we are negatively affected by chronic stress. 

[Click to Download]

Where does the challenge of chronic stress appear for many business leaders? 

Obviously, running a team or business is a high-pressure, target-rich environment filled with continual triggers that can lead to symptoms of chronic stress – whether those are physical, behavioural, emotional or cognitive as outlined in the above infographic. 

Here are a few of the most common chronic stress creators for business leaders:

  1. Cash Insecurities

Not knowing if you can pay your employees or vendors is an awful feeling that can create an endless thought loop of stress. Most of us have felt this at some point in our careers, sensing this impending dark cloud constantly lingering in our periphery. Even when you can find a moment of calm, your mind soon remembers the concerns and the cycle of stress begins again. 

  1. Team Performance

There is nothing quite as stress-inducing as the thoughts and feelings around paying employee’s salaries yet still feeling the responsibility for ensuring their work gets done. This is the easiest time to question why you have a company in the first place. You have magically figured out how to work harder, have more pressure, yet make the same or even less money than when you were running the company alone. Why is it so hard to find humble, hungry and smart team members?!

  1. Accumulative Problems 

When you are a business owner or even run a team within a larger business, unplugging from your work is difficult to do. One of the biggest chronic stress creators is the consistent concern about what the next big problem will be. And because you don’t know from where the problem is going to arise there is a constant sense of stress around these unforeseen, often imaginary issues. 

Not feeling in control can have the same effect on your heart as actually enduring the stress-inducing problems. So even when problems aren’t hitting you, they are still impacting your body and its health.

Your body responds to this loss of control in the same way it responds when stressful events happen. It increases:

            • The number of stress hormones in your body
            • The amount of inflammation in your body
            • Your heart rate and/or irregular heartbeats
            • Your blood pressure

Following are some prime examples of how business owners we’ve worked with have improved some of their chronic triggers for stress:

  1. Clear Cashflow Forecast 

On of our clients had had enough with feeling the fear of not knowing what she could and could not afford to pay for in her business. Her solution was to do whatever was necessary to obtain an accurate 3-month cashflow forecast. Although it took a while to implement the necessary processes and disciplines, within a couple months of testing and tweaking she not only found financial clarity, she also identified some quick cost-savings wins that more than remunerated the time and effort. 

  1. Better Accountability Chart

We challenged a client to reassess how their management team was lacking accountability for their results. Fortunately, this leader trusted our guidance, setting aside judgments on what should be required of a manager and acting on our suggestion. Our request was that he spend time clarifying each of his managers’ roles in two key areas. The first: describing specifically what the role was accountable for. It didn’t take long for the leader to see how expectations weren’t clearly defined, either to them or to their managers. The second area: to identify objective ways to measure whether the manager was delivering on their role’s requirements. This necessitated a significant amount of thought by the leader, making it abundantly apparent that there could be a disconnect between the leader’s expectations and the manager’s objectives. The end result was a better-performing management team that had improved clarity on how to fulfil their responsibilities as well as support the company leader, creating s significant reduction in stress throughout the management team.

  1. Clear Process for Responding to Problems

One of the business leaders we work with struggled with the concern of impending problems. She found it consuming her personal life and made it a key deliverable for us to assist her with. After some investigation we found that her company didn’t have a clear and proactive way to identify, discuss and solve problems. This meant that many problems were not identified early on because they weren’t big enough to receive attention. So what could have begun as a small error rapidly escalated into lost revenue and the client firing the company. 

This is like the principle of forest fires. By eliminating a single spark, you can save an entire forest; so by recognising and resolving small issues early on, you eradicate the possibility of major problems arising.

We helped our client and her team allocate a portion of their weekly management meetings to identifying any issues and resolving them before they escalated. These clear resolution strategies were then tracked week-over-week until the issue was fully resolved. This allowed our client to feel she was in control of seeking problems out rather than waiting for the next big issue to land on her desk. More than that, the stress she had been feeling in her time outside of work completely evaporated.

These three examples demonstrate how problems can get the better of us, creating untold levels of stress. But how, with a little planning and thought, they can be easily rectified, not only removing any stress they instigate, but also improving company functionality and productivity.

This outlines the ways in which chronic stress can creep up on us, but also how this can be rectified. Next week, we will take a look at three specific strategies for removing chronic stress from your business life.

Until next week, enjoy the process!

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When “Ready, Fire, Aim” Hurts Business Results

Business Results

When we feel pressure to achieve business results, such as greater revenue or profitability, we often opt for quick and immediate action – that’s even what productivity specialists advise. 

While there is truth in the adage, “the only thing worse than a bad decision is no decision”, those kinds of adages don’t always apply and it can save you a lot of time, money and frustration when you understand when the situation is right for a quick decision and when it makes more sense to “measure twice and cut once” to achieve better business results.

We all want to be effective business leaders. Somewhere on the entrepreneurial journey most of us develop a belief that spending money to solve a problem or to get desired business results is a productive action. And although investments of time and capital are required to achieve results, we get lured into believing that because we’ve spent some money we assume the issue is resolved or the result will be reached. This mindset is often the reason many entrepreneurs never obtain the results they are wanting and run out of money trying.

The goal of this article is to remind us that while quick and decisive actions are good, they need to be balanced with clarity of outcome, simplicity of strategy, and other things that may require time but allow for better long-term business results. There is a reason why one of President Lincoln’s most famous quotes is, “If I only had an hour to chop down a tree, I would spend the first 45 minutes sharpening my axe.”

Here are three scenarios where a Ready, Fire, Aim approach hurts you and undermines your business results:

  1. Business Result #1: Spending Marketing Dollars

Marketing is likely a painful concept for you if you are like most business people. And like all painful things, we do our best to avoid the topic as much as possible. When the need arises to obtain more clients or increase our brand awareness we tend to delegate the work to external marketing agencies. 

We do this in an attempt to avoid the discomfort of working within the marketing arena and hoping that people outside of our company will understand the nature of our products and services. 

Where the Ready, Fire, Aim approach normally rears its head is in selecting an agency to work with. We begin interviewing prospective marketing agencies before we have clarified some key data points. 

One of these is who our core customer or buyer persona is. It is not rocket science to figure out what our best customers look like. Even if you aren’t comfortable with the exercise, a quick Google search on ‘Best Buyer Persona Questions’ will provide numerous examples on how to clarify who your desired customers are. 

Often these details will affect what agency you are looking for and how to investigate whether an agency has had success with marketing in your specific field of business Selecting an ill-fitting agency will often cost you up to a year of time and thousands of dollars, often completely failing on your business results.

  1. Business Result #2: Hiring a New Employee

There seems to be a global acceptance that it is impossible to know whether a new employee will ultimately be a good fit in an organisation. This sentiment makes it easy for people to want to take the Ready, Fire, Aim approach in hiring new team members. Where this breaks down is when that strategy undermines the need to have a clear job description identified and precisely what the position entails.

This usually incorporates three specific areas:

      1. What business results the position is accountable for producing
      2. What the key activities are for the position
      3. What Key Performance Indicators (KPIs) define whether the role is being performed at a satisfactory level.

When we are clear on what the role needs to produce for results we will have a greater understanding of the skillset required of a new employee. 

This has two specific outcomes. On the one hand, it may discourage applicants, but these will likely be unable to achieve the desired business results. On the other, it will provide clarity for applicants, displaying the true breadth of a position that could initially be perceived as minimal. Either way, it promotes greater clarity of the position, often saving you time and money in interviewing people who aren’t a good fit ever being hired in the first place.

Once again, an ounce of prevention in the form of a more developed job description is worth more than a pound of treatment once someone has been hired into a position they may be inadequate for. 

  1. Business Result #3: Building Effective Teams

With so many team-building products and services out there, it is easy to fall into a Ready, Fire, Aim mindset, purchasing something promoted to build well-functioning teams. Once again, prior to purchasing something that could help you and your team achieve better business results, it is important to clarify what you are wanting to accomplish with your team dynamics. 

A team whose performance is impacted by a lack of trust is quite different from a team that is struggling with accountability or fear of conflict. Yet, with the Ready, Fire, Aim mentality; we purchase 360-degree reviews and Myers Briggs tools simply because it is marketed as the team-building solution.

Less is more with most business activities. When time is spent clarifying ‘what’ specifically we are wanting to accomplish, the ‘how’ will often reveal itself in more practical ways than simply purchasing an ad hoc product or service. The extra time spent initially will be time saved tenfold, and more than compensated for in business results.

That is what Lincoln is talking about when sharpening his axe. A little more effort in clarifying what to aim at will pay dividends on the value obtained when firing your shot. 

We hope this article helps you find a bit more patience with the effort of aiming and that your shots in business generate more value for you both professionally and personally.

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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