Over the past seven weeks, we have discussed the key elements and five essential pillars of an effective Business Operating System (BOS). Now let’s talk about an easy way to incorporate the BOS framework into your business.
There are seven specific steps you should take to implement this Business Operating System:
Business Operating System: Step 1
The first step is to clarify who you are going to work with to implement your BOS framework over time. In the beginning, the focus will be on tightening up the planning and documentation. You want to keep this within a small group; often it can just be one other person to share your ideas with. When you feel prepared and ready to begin having weekly meetings, you will then want to include your direct reports. There are situations in larger companies where it can make sense to add a few more people who oversee key activities within your company but mainly they should be your direct reports.
Business Operating System: Step 2
Developing your company’s core values, vision, mission statement and USP is a key component of the BOS framework. These may continue to evolve over time, but initially, they need to be good enough to encapsulate what the company stands for. Another part of the company documentation that needs to be established is the longer-term strategic plan with a future view of between 3 and 10 years. How are you going to achieve your lofty goals? You want enough substance and motivation to give your plan some credibility.
Once this longer-term strategy feels credible you are ready for Step 3
Business Operating System: Step 3
The next step in the process is to clarify your next one-year financial goals and objectives. These need to be both compelling and strategic. Once again, these can be strengthened and adapted over time.
Business Operating System: Step 4
Creating or improving your company scorecard will allow you to identify and discuss what the critical activities and numbers within your business structure need to be and who is responsible for them. Once again, the key is not to achieve perfection in this, but rather to develop a starting point from which you can continually evolve.
Business Operating System: Step 5
With the first four steps completed, you are now ready to initiate your weekly management meetings. This first meeting should introduce the objectives and strategies for the meeting and with each subsequent meeting the agenda should become an ever-stronger guide to productive meetings that promote individual accountability.
Business Operating System: Step 6
The next logical step after your first 90 days is to conduct the first quarterly meeting. This will give you the chance to identify a clear set of key quarterly ‘rocks’ or objectives for each team member that will align with accomplishing the company’s one-year goals. It will also provide you a bit more motivation and urgency to improve upon the company declarations and longer-term goal definitions.
Business Operating System: Step 7
The final step is to continue refining each of the previous steps of this management process over time. Within a short period, this strategy will take shape and need less, if any ongoing development. From this firm foundation, it is now possible to begin enhancing the people and process management strategies and disciplines within your business.
Conclusion
By following my previous blogs and implementing them through this framework, your business will develop more transparency and efficiency. With the Business Operating System applied to your company at a management level, it is now also possible to develop similar operating frameworks at every level of your business.
We hope this process sounds both practical and achievable. Just like in business, a good idea is almost worthless without dedicated execution.
By effectively implementing these steps, you will develop:
a strategy to generate better execution results, helping you to work smarter, not harder
a stronger team of focussed, motivated and talented individuals working to the same goals
a more valuable company by being able to demonstrate a proven framework for strong ongoing company performance.
Feel free to contact us with any questions along the way and, as always, enjoy the process!
Many businesses underestimate the value of documenting their core processes, assuming that they are already being done the right way, and that their employees know what they are doing. However, in today’s competitive marketplace, it is more important than ever to have a clear understanding of the processes that drive your business and adapt accordingly.
As I’m sure you already know, documenting business processes involves capturing and organising the steps required to complete a specific task or project. This could include anything from how to onboard a new employee to how to manufacture a product.
First, let’s remind ourselves as to why it is important to be able to consistently improve process documentation over time:
Improving Process Management
One of the key reasons why businesses need to document their process management is to ensure consistency and quality across all operations. By defining and standardising the steps involved in completing a task, you can minimise errors and improve the overall quality of your output. This is especially important for businesses that rely on repeatable process management to deliver their products or services consistently.
Another benefit of documenting your business processes is that it can make it easier to train new employees or delegate work to existing employees. When processes are clearly defined and documented, it becomes clearer for people to understand how things are done and what is expected of them. This can reduce the learning curve and help new employees become productive more quickly.
Furthermore, having well-documented process management can also increase efficiency and productivity. By breaking down complex tasks into smaller, more manageable steps, you can identify areas where processes can be streamlined or automated. This can help you eliminate unnecessary steps, reduce bottlenecks, and ultimately save time and resources.
Documenting your business process management can also help you identify areas where improvements can be made. By having a clear understanding of how things are currently done, you can identify areas where processes can be improved or optimised. This can help you reduce waste, improve quality, and increase overall efficiency.
Finally, documenting your business process management can also help you prepare for growth and scale. As your business grows, it becomes more difficult to keep track of everything that is going on. By documenting your processes, you can ensure that everyone is on the same page and that tasks are being completed in a consistent and efficient manner. This can help you scale your business more effectively and avoid potential issues down the road.
So now that we’ve reminded ourselves on why process management is necessary to scale a business. Let’s talk about how you can achieve this amongst a million other competing pressures.
How to Achieve Effective Process Management
First, the BOS framework download has a tab to easily document you company process management. This allows for quick reviews when questions come up about how things should be done or a place to put lessons learned that involve a certain business process. Often it is seen as too time-consuming to find this documentation during a management meeting, so the conversations remain at a highly generalised level resulting in lower-quality conversations and solution strategies.
The BOS framework promotes is an ongoing focus on making incremental process documentation improvements as and when they relate to executing strategies and objectives. Creating process documentation for documentation’s sake isn’t practical, but creating it as the company solves issues or gains opportunities that involve the business process adds to the quality of the solution and increases the company’s overall level of process management over time.
Documenting your business processes is critical for achieving consistency, quality, efficiency, and scalability. It helps you reduce errors, train new employees, increase productivity, identify areas for improvement, and prepare for growth. If you haven’t already started documenting your core processes, it’s time to start now.
Determining Which Processes are Most Important to Document
The second practical strategy for developing business process management is to refine the development effort and work from the most critical processes downward.
In essence, you are making a conscious decision to develop your core business processes over a defined time period. This can work better than your past results with the help of the BOS Framework. In addition to providing you with a strategy to access your process management information, the BOS framework also pushes you during quarterly meetings to identify key processes that have strategic value in documenting, then uses ‘rocks’, objectives, or projects to make incremental improvements over a 90-day period. You will be amazed at how quickly you develop a solid library of business processes while not impacting the execution efforts on more urgent issues.
Now that we understand the way in which to iteratively improve process documentation over time without disruption, let’s come back to how to determine the most important processes to document.
The first step is to prioritise them based on their impact on the organisation. Look at the processes that are critical to the success of your business and determine which ones have the most impact on your ability to achieve your goals. This can be done by asking questions such as:
Which processes expose your company to the greatest amount of risk?
Which processes are most important to customers?
Which processes are most closely tied to revenue streams?
Which processes have the highest risk of failure?
Once you have identified the most important processes to document, the next step is to break them down into smaller, manageable components. This will help ensure that each process is documented thoroughly and accurately. You can use flowcharts or process maps to help visualise the steps involved in each process. We’ll talk more about this shortly.
There are numerous ways to get help on how to document your process management. The point we want to focus on is the critical success factor in process management. This is something the BOS framework supports, keeping ongoing visibility and pressure on the need for well-documented business management.
By following the steps, utilising the BOS framework and considering the benefits of process documentation, you can begin to build a culture of continuous improvement within your organisation. This will help ensure that your team members have the tools they need to be successful and that your organisation is positioned for long-term growth and success.
Insights When Documenting Key Processes
Over the years we have observed some particularly helpful strategies that don’t often show up in your typical business process descriptions.
The first of these insights is the value of focusing on clear triggers to commence and complete a business process. We want to be acutely clear on how this process begins. Some processes start on a specified date or time, others begin when an event occurs, but however it occurs each process should begin in a specific way. Often more valuable is the second step, which is the definition of how the process should end. This clarity often provokes discussions and strategies for doing it well and not cutting corners. Thus, you can often tighten up your process strategy and clarity by ensuring those two events are clearly defined.
The second insight is adding a section to the documentation titled “Screw Ups Look Like…” or something similar. This becomes an all-important benchmark of all the lessons learned over the years through people completing this process. This strategy focuses on retaining all the knowledge gained and problems paid for by the company when this process was done incorrectly or poorly.
This “Screw-Up List” becomes a major asset for quickly training people on key data points that will prevent repeating mistakes made in the past. It also helps provide more context to why the process is important.
The third insight is using a “Who Is” versus “Who Should” analysis for each step in a process to identify opportunities for delegating work within the organisation. This exercise often uncovers opportunities to free up the most talented people in the organisation to do more valuable work.
Clarity is king in life and business. Clearly defined and developed business process management can be a game changer for scaling or selling a business. The right approach is that of a marathon, not a sprint. The good news is that you can begin gaining benefits almost immediately after starting down this journey.
This completes my seven-step guide to the pillars Business Operation Systems. With this information, you will be able to refine your company processes, manage your staff more effectively, increase productivity and yield, and foresee issues and opportunities before they occur.
Next week, we will look at the strategies for implementing all you have learned in this series.
Core values are the fundamental beliefs and principles that guide the behaviour and decisions of an organisation and its team members.
Having clearly-defined core values is essential for an organisation’s success. They define the organisation’s identity, help to create a shared vision and sense of purpose among team members and guide decision-making at all levels of the business. Core values also help to attract and retain the right employees, who share the same values and beliefs as the company.
So, how can you ensure that core values are adequately used in your company’s day-to-day operations and universally adopted by team members? The first step is to clearly define and communicate your core values to all employees. This can be done through company-wide meetings, employee handbooks and other communication channels. It’s important to make sure that all team members understand the significance of these values and how they are expected to uphold them in every aspect of their work.
Once core values have been defined and communicated, it’s essential to integrate them into all aspects of the business. This includes everything from hiring and onboarding processes to performance evaluations and daily operations. For example, when hiring new team members, it’s important to assess whether they share the company’s core values and would be a good fit for the organisation’s culture.
How the Business Operation Strategy (BOS) framework drives the use of core values is that it has a five-minute section in every weekly meeting in which each team member provides an observation on the use of a core value. It is quick but effective for reinforcing core and in the conversations of team members – especially when those values are broken.
In order to maintain the integrity of core values, it’s important to hold employees accountable when they fail to meet the standards set by the business.
Ultimately, the success of an organisation is dependent on its ability to align its operations and team members with its core values. By clearly defining and communicating these values, and integrating them into all aspects of the organisation, companies can create a culture of excellence and achieve long-term success. This is not just a common business school strategy, it is a fundamental law of business.
In this way, core values become the foundation of a company’s success. They represent the organisation’s culture and personality, and guide decision-making at all levels of the business. To ensure that core values are adequately used in day-to-day operations, it’s essential to clearly define and communicate them to all employees, integrate them into all aspects of the organisation, and hold employees accountable when they fail to meet the standards set. By doing so, companies can create a culture of excellence and achieve long-term success.
If you are struggling with getting Core Values effectively utilised in your organisation simply contact us and I’m sure we will be able to provide you with some troubleshooting support along with some additional strategies.
Team Member Accountability Chart
An organisational chart is a visual representation of a company’s structure, showing the roles and relationships between different positions. However, it doesn’t always provide the necessary detail to understand who is responsible for what tasks and outcomes. On the other hand, a Team Member Accountability Chart is a more focused tool that begins by identifying the correct positions for a specific company’s work output needs.
To create an effective accountability chart, it is important to involve key stakeholders in the process. It starts with what the business needs to deliver and is accountable for. It then identifies the necessary seats to complete this work and activities. Each seat clearly calls out what it is accountable for, describes the core activities and defines the fundamental KPIs it needs to achieve. So the required work and outcomes are first defined before any team members are contemplated for what roles, or seats, they could fill.
When you have a clear company structure that is aligned to best produce the work required to maintain a growing company you are then ready to add team members to the seats and work through the process of ensuring they have the ability to check three boxes for the seat you are considering them for. This is defined by three key questions:
Do they understand what the seat needs to deliver? This may seem straightforward but it often isn’t when the person is the wrong fit for the seat.
Do they want to do all that is necessary to deliver the expected results? This is a big one; often team members understand what is required and can do the required work but they simply don’t want to. Cold-calling is a good example for a seasoned sales professional. Often they are not interested in going back to hammering the phone.
Do they have the necessary skill sets, capacity or capabilities to deliver? It is also common to have people who really want to do the job at hand but they simply lack the skills or experience to be successful in the near term.
The BOS Framework doesn’t try to imply that these are the only strategies for developing and maintaining a great company culture. What it does do is provide a practical and effective process for consistently managing some core strategies for having a strong culture.
So an accountability chart is different from an organisational chart in several ways:
First, it is based on outcomes, not positions. This means that the focus is on what needs to be done to achieve the company’s goals rather than on the positions themselves.
Second, it is more precise than an organisational chart because it clarifies the activities and KPIs that each position is responsible for.
In addition to defining roles and responsibilities, an accountability chart can help identify gaps and redundancies in the company’s structure. It can also help with decision-making by providing a clear picture of which team member is responsible for what tasks and outcomes. This makes it easier to hold individuals accountable and to make necessary changes to improve overall performance.
An accountability chart should be reviewed regularly to ensure that it remains accurate and up-to-date. Within the BOS framework accountability is regularly reviewed at quarterly meetings. As the company grows and evolves, new functions and roles may be required, and it is important to adjust the chart accordingly.
An accountability chart is a powerful tool for building high-performing team members. By defining roles and responsibilities in detail, it can help prevent confusion and ensure that everyone is working towards the same goals. It is important to involve key stakeholders in the process of creating the chart and to regularly review and update it as the company evolves. By using an accountability chart, companies can build a culture of accountability and achieve greater success.
Team Member Check-Ins
The importance of ongoing check-ins cannot be overstated. They are more effective than annual reviews and the BOS framework ensures these check-ins continue to happen consistently.
We don’t mean traditional annual reviews; we are talking about monthly or quarterly meetings where we discuss not only performance but career path options, team dynamic observations, current bottlenecks and challenges, and more. Each review is expected to be a high-quality interaction.
For many years, companies have relied on the annual review process to assess employee performance. However, research has shown that annual reviews are often ineffective and do not provide the necessary feedback to improve the performance of team members. This is where ongoing check-ins come into play.
Ongoing check-ins are a proactive way to investigate how team members are performing with their core deliverables, identified objectives, career development, and other areas that are critical to their engagement and success. These check-ins are typically held quarterly and provide managers with an opportunity to give and receive feedback, identify areas for improvement, and address any concerns or issues that may arise.
One of the key benefits of ongoing check-ins is that they allow for more frequent feedback and discussion. This is important because it enables managers to address any issues as they arise, rather than waiting until the end of the year. By having ongoing conversations with team members, managers can provide timely feedback, recognise accomplishments and identify opportunities for growth and development.
Another benefit of ongoing check-ins is that they encourage accountability. When employees know that they will be meeting with their manager on a regular basis, they are more likely to take ownership of their work and stay focused on their goals. This creates a culture of accountability, where each team member is responsible for their own success and that of the team.
Ongoing check-ins also provide an opportunity for career development. During these meetings, managers can discuss career goals with their employees, identify areas for improvement, and provide training and development opportunities. This helps team members feel inspired, valued and supported, which can lead to increased engagement and productivity.
So, how do you implement ongoing check-ins in your business? Firstly, it’s important to set clear expectations and establish a schedule for these meetings. Make sure everyone on the team understands the purpose and format of the check-ins, and ensure that they are scheduled well in advance.
Next, make sure that the check-ins are focused on specific goals and objectives. This involves identifying what success looks like for each team member and creating a plan to achieve it. It’s also important to be transparent and honest during these meetings, providing constructive feedback that can help employees improve and grow.
Finally, use ongoing check-ins as an opportunity to recognise and reward good performance. This can be as simple as acknowledging a job well done or providing incentives or additional opportunities for growth and development.
I’m sure much of what you’ve just read you already believe and know – right? Why then is it so difficult for most companies to implement consistently and effectively? Once again, our observations are that there often isn’t a management framework to help team members remember to complete these or feel accountable for completing them. In short, they don’t have the visibility they require. The BOS framework provides that visibility and accountability by including team members within the quarterly meeting agenda.
Ongoing check-ins are a powerful tool for managing employee performance and fostering a culture of accountability, growth, and development. By establishing a regular schedule of check-ins, setting clear expectations and providing constructive feedback, you can create a more engaged and productive team. So, consider fully implementing ongoing check-ins in your organisation today and watch as your team members thrive and succeed.
As I’m sure you know, weekly meetings are an essential part of management practice, and a critical aspect of ensuring the continued success of any business. They provide an opportunity for communication, collaboration, and decision-making, among other things. However, poorly run meetings can waste valuable time, lead to frustration, and negatively impact the morale of the team.
To ensure that your meetings are productive and run smoothly, there are a few basic requirements that should be met.
Weekly Meetings: Requirement 1
The first requirement is to have a clear purpose for the meeting. A clear purpose ensures that everyone is on the same page and can contribute to the meeting’s success. We focus on weekly management meetings which have a two-fold purpose at the simplest level of monitoring company and team performance and effectively identifying and solving for any issues that are getting in the way. We could also clarify our weekly meetings with the following 5 objectives:
Monitor company and team performance
Share key information amongst the team
Identify current challenges and opportunities that need to be addressed
Create clear action plans for required solution strategies
Monitor the follow-through on tasks that stem from the meetings.
If your weekly meetings don’t have this clear set of objectives then I’d suggest you go back and revisit your desired meeting results and identify something that truly matters to you.
Weekly Meetings: Requirement 2
The second requirement for weekly meetings is to have the right staff members in attendance. Attendees should include those who can contribute to identifying, discussing and resolving issues that come up during the meeting.
Weekly Meetings: Requirement 3
Thirdly, you should have a well-defined agenda for the meeting. We have identified a basic agenda that consistently delivers the desired results. Every company will end up with a slightly different agenda the core process should remain the same. below is an agenda template to download and implement:
Weekly Meetings: Requirement 4
The fourth weekly meetings requirement is to incorporate a leader or facilitator. The facilitator ensures that the meeting stays on track, that all attendees have the right amount of opportunity to contribute, and that decisions are made on core issues rather than the first problem that is identified. The facilitator should also ensure that the meeting starts on time and is managed in a way that it both ends on time and addresses the most important topics. This can be the company leader or another capable and credible person.
A realisation we’ve had in helping companies implement the Business Operation System (BOS) framework is the value that an outside facilitator can bring to management meetings – whether in weekly or quarterly formats. Most leaders find more value in not having to run the meeting because allows them the chance to listen, observe and think more clearly about what is and isn’t being said. They find they don’t have to use their attention and energy to keep the group focused or manage discussion. They have more attention for maximising the productivity of conversation and the overall meeting. This is why the majority of what we do is facilitate meetings for companies leveraging the BOS framework.
Weekly Meetings: Requirement 5
The fifth requirement of weekly meetings is to have effective communication throughout the meeting. All attendees should be expected to contribute regularly, and the discussion should be kept on topic. Attendees should also listen to each other actively, and avoid distractions such as mobile phones and laptops.
Weekly Meetings: Requirement 6
The Sixth requirement is to have effective time management during your weekly meetings. The agenda should be followed closely, and the meeting should not run over the scheduled time. The meeting facilitator should ensure that everyone has the chance to contribute, but should also keep the discussion moving forward to ensure that all necessary topics are addressed.
Weekly Meetings: Requirement 7
Last but certainly not least, you should have a clear set of action items and follow-up after the meeting. This includes documenting decisions and any action items that were assigned during the meeting, as well as setting a timeline for completion. Follow-up should also occur after weekly meetings to ensure that action items are completed, and that progress is being made towards any goals or objectives that were set.
Summarising these seven requirements, to have highly productive management meetings, you should implement the following:
A clear purpose
the right attendees
an effective agenda
an experienced meeting facilitator
effective time management
a clear set of action items that are relentlessly followed up.
By following these requirements, you can ensure that your weekly meetings are productive and contribute to the continued success of your business.
Critical Success Factors
Now that we have discussed the core requirements for productive weekly meetings and why they are important for business growth, we can explore two critical success factors that are essential for achieving your business objectives. These two factors play a significant role in ensuring that meetings are productive and effective in driving business success.
Task Follow-Up
Nearly every meeting has tasks being generated as a result of the discussions. These tasks must be followed up in subsequent weekly meetings to ensure that they are completed on time. Following up on tasks assigned from previous meetings is crucial for maintaining accountability and progress towards business objectives.
To make task follow-up more effective, it is essential to have a tracking system in place as you will find in the meetings tabs of our BOS Spreadsheet. This tracking system should clearly show who is responsible for each task, the status of each task, and the deadline for completion. By having a clear tracking system, it becomes easier to ensure that tasks are completed on time and that everyone is held accountable for their responsibilities.
Again, you will see in the BOS Spreadsheet that each weekly and quarterly meeting sheet has a place to add and monitor to-dos with columns for the task owner along with the due date. This makes the process of task management easy to follow and highly visible.
The second critical success factor is issue management. The majority of your weekly meetings should be spent on problem-solving the most important issues that could prevent the team from achieving their objectives. To do this, it is important to identify and prioritise the most critical issues that require immediate attention.
Once the most critical issues have been identified, they should be discussed and resolved during weekly meetings. To ensure that the issue is fully addressed, it is important to assign specific action items and follow up on them in subsequent meetings.
Task follow-up and issue management are two key factors for productive management meetings. By ensuring that tasks are followed up and critical issues are addressed and resolved, meetings become more effective in driving business success and creating trust amongst the team.
The Next Level of Meetings
We have now covered meeting basics and how to incorporate critical success factors such as task follow-up and problem-solving. But what’s next? How can you further improve the effectiveness of your weekly meetings?
The answer lies in something I mentioned briefly when covering company performance and that is the use of scorecard forecasting. Simply put, forecasting is the process of predicting future outcomes based on current and historical data and trends. In the context of business meetings, it means projecting how well the company (or specific team) is likely to perform in the future based on past data and real-time observations.
Why is Forecasting so Important?
Forecasting allows you to be proactive rather than reactive. Instead of waiting for problems to occur, you can anticipate them and take corrective action before they impact your bottom line. It also helps you make better strategic decisions, allocate resources more effectively, and communicate more clearly with stakeholders.
The Key Steps to Forecasting
First, you should already have an effective company scorecard, as described in previous modules. We do not suggest jumping into forecasting efforts before first ensuring that you are monitoring the right KPIs along with the correct target levels.
The next thing you do is to ask those responsible for reporting the previous week’s KPIs to begin forecasting what they feel their numbers will be for the upcoming week and sometimes longer depending on the subject.
The act of looking into the future to predict where performance will be will often uncover concerns and issues earlier than when KPIs are simply reported as a result.
Over time people become more calibrated with their understanding of what is and isn’t working, furthering the company’s ability to identify issues and address them when they are smaller and easier to manage.
Taking your weekly meetings to the Next Level involves more than just basic meeting etiquette and task follow-up. By incorporating forecasting into your meetings, you can become more proactive and effective in achieving your business objectives. With this single strategy, you can take your business to a new level of execution.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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:
What was the completion definition?
What was the actual result?
Are the outstanding action items on track?
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:
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.
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.
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
Do you invest one day every quarter to planning with your management team?
Do you have a clear process for working through the quarterly planning process?
Does your team rate the quality of the meetings as high?
Do you review the key aspects of the previous quarter’s performance during the meeting?
Is the majority of time spent on discussing and resolving the main issues and opportunities for the company?
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:
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.
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:
What business results the position is accountable for producing
What the key activities are for the position
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.
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.
When you take the time to organise your business, you not only improve its functionality, you can also save time and money, increase productivity and optimise profitability.
As I have discussed in the previous blogs of this series, a disorganised business can become a self-destructive machine and its own greatest hurdle to success.
In week one, we identified whether or not a business was problematic; last week we explored the repercussions of these issues.
Today, we look at solutions.
Let me begin by stating that to effectively organise your business it takes time and effort; it is a process that simply can’t happen overnight.
However, by setting aside the few hours it will take, you will save yourself time exponentially, creating a far more efficient business that continues to steadily improve week over week.
You will now know whether or not your business is healthy, you will understand the problems and the implications they have. Now, let’s organise your business in five easy steps:
How to Organise Your Business & Make it More Presentable
Step 1 – Re-Clarify Your ‘Why’ (60 Minutes and 1-2 glasses of red wine)
This concept isn’t new but it is often misunderstood.
We have a tendency to think that ‘why’ we want to grow our business and make it more profitable is self-evident – but it isn’t! Why you need your business to be more profitable will be different to another business owner or manager, depending on business type, current size and personal perspective. In fact, this ‘why’ is so different from person to person that after 25-plus years of trying anticipate a person’s ‘why’, I’ve officially stopped trying to guess because I’m wrong 98 percent of the time!
The reason you want to be clear on your ‘why’ is because that is where your greatest strength lies. You need sustained energy and tenacity to grow a consistently highly-profitable company. Show me a flat company and I’ll show you a leader who has lost their ‘why’. When you are thinking through your ‘why’ remember that you will likely be far more passionate about doing something for someone other than yourself, so watch for that thread when clarifying your ‘why’.
Assign an absolute maximum of 60 minutes to completing this task. Revisit your Vision Statement for where you want your company to go and why. Do the same for your Mission Statement, which is basically how you intend to use your product or service to get to your vision target. Finally, identify the three to seven qualities you most like in people you work with, which will reflect your company’s Core Values.
A quick hack on core values is to utilise Patrick Lencioni’s work. He identified that the qualities of Humble, Hungry and Smart are consistently found in great team players. You can see his descriptive and informative video on this here. Over time you can use more descriptive words, but in all likelihood they will be derivatives of those three core values.
Step 2 – Identify Your Top 5 Company Performance Numbers (60 Minutes)
Don’t over think this. Imagine you are cut off from communications with anyone at your company but you can receive five numbers each week to monitor and organise your business. What would those five numbers be? Typically, it will include a number defining ‘new opportunities’ our leads, a number about your sales pipeline, and a number representing actual closed sales. Often a number on recognised revenue may be included, but that depends on your type of business. Finally, a number explaining customer satisfaction or employee safety may be added – again, depending on business type.
As you are seeing, these are not the typical Profit and Loss numbers your accountant may more readily submit to you. Although your profit and loss statistics are important, they are often non-specific to your company’s functionality and don’t help you understand how your business is performing now – not to mention how it will likely be performing over the next few months. Your five numbers should provide a snapshot of the current health of your business and a sense of where things are headed.
Next, you need to figure out how you will obtain and review these five numbers each week. This may take some work but it will prove incredibly valuable in the longer term.
Step 3 – Begin Having Real Weekly Meetings Focused on Company Performance (60-90 minutes per week but should replace any existing management-type meetings)
You are now ready to have a real weekly company performance meeting with your key people. Schedule a weekly meeting of about 60-90 minutes where the agenda is consistent and focused on three things:
Reviewing the Top Five performance numbers and identifying any issues
Sharing any relevant customer or employee headlines to keep key players informed
Identifying, discussing and resolving for any identified problems (or opportunities) the company is facing.
Then monitor the execution of those identified tasks to ensure that they are effectively implemented until completion.
Over time, this meeting will change how your company operates and highlight the effectiveness of individual team members. Within a month your team will begin to experience a shift in accountability and focus without the need for new strategies.
Step 4 – Implement a Quarterly Day-Long Meeting (6-8 Hours each quarter)
After about a month of these regular weekly meetings you will be ready to develop greater clarity for the company and team. In a day-long meeting, begin by identifying a set of 12-month goals. This should include financial numbers as an objective success measurement, but also highlight company improvement goals in the areas of:
Team development
Key process improvements
Specific technology enhancements.
From here, identify what specific improvements you need to achieve over the 90 days in order to be on track to accomplish the 12-month targets.
Step 5 – Update Your Company’s Structure (3-4 hours)
Most companies’ organisational charts begin with people and are completed with people in mind. When you feel established in your new processes, the next big opportunity is to think about your company from the lens of, “What will it take to get paid by customers while remaining compliant with regulators?” This task will result in clarity of the specific ‘Seats’ or roles a company requires to operate most efficiently. It is important to understand that when you have a small number of employees you can easily have more seats than team members. In this case you need to assign multiple seats to a single person.
Each seat is defined by three things:
What it generates or provides
What its core activities include
What key performance numbers it provides and adheres to (eg: how you quantify whether the seat is delivering on its tasks)
This can be thought of as an Accountability Chart rather than Organisational Chart. The key benefits are that you will optimise the company’s structure according to the work required rather than the people in the organisation. Additionally, the clarity of what is expected from each seat will assist staff in understanding and managing their obligations and role requirements.
After identifying the required seats for your company, you can begin assigning people from your team into these well-defined positions. You will often find it will be easy to place most of your team members nicely into the seats outlined.
There may well be a couple that will not be perfectly suited to a specific seat. These people will require additional thought and discussion to determine whether they are actually appropriate for your company. The goal is to always try to find a seat and set of activities a staff member can be successful at or that aligns with their specific skillset. The good news is whether you can find a fit or not, both you and your team will have more clarity on the skills you need for a specific seat.
With these five steps implemented, you will be well on your way to enjoying a healthier, more predictable and profitable business, freeing you up to focus upon the continued improvement of your company, reducing your stress, overtime and additional tasks.
We hope this Five-Step strategy provides you the structure and direction you need to better organise your business, making it more attractive to your potential clients, investors, bankers, or future employees.
Life is too short to get stuck within a hectic company so, as always, enjoy the process!
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.
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.
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:
Low profitability due to inefficiency and elevated labour costs
Difficulty in training staff to be productive quickly
Repeating mistakes already experienced by the company
Low levels of accountability by team members when things go wrong
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:
Creating manual work-arounds for otherwise automated or centralised processes that result in information being stored in multiple locations
Not using certain functionality within existing applications through laziness or a lack of education
Duplicating information and maintaining it in spreadsheets rather than in the native application. This is frequently seen in Cloud-based accounting software
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.
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.
