The Top Ten Things That Require Your Attention
This is a self-assessment test. For best results, have everyone on your management team take the test separately and average your scores. I am sure you will have a lot to chat about afterwards.
For each of these talking points, give your self a score from a low 1 to a best in class 5. It helps if you think about some top-notch businesses you know before you give yourself a 5. No half points allowed. No extra credit. No collaborating – do your own owrk! The scoring scale:
- Approaching crisis level. This hurts us almost everyday.
- Needs a lot of work. We focus on this infrequently and it shows.
- We’re OK. Not much different from our peers.
- Better than most. We actually work on this.
- Best in class. Other companies ask how we do it!
You will notice there is nothing on this list about great people. You all have wonderful employees with a lot of talent, drive, and ingenuity. You have to ask, are you doing enough for them? Can they realize their potential? Is management doing its job?
Ready? This is what great companies do, in no particular order:
Management’s Free Time
Are senior managers (or owners) readily available to handle personnel, customer, or planning issues? Are company or departmental projects identified and completed on time? Are managers well informed and proactive? Do employees feel they can ask a manager anything? (score 1 to 5)
Mastery of Technology
Do you have the personnel and resources to figure out new technology? Are you masters at existing tech? Do manufacturers call you to better understand how their products work? Do you have recognized, undisputed experts in various fields with time for research as opposed to one super-busy know-it-all? Are you fearless about trying new things? (score 1 to 5)
Is your company purchase order compliant? Can you trust your monthly accruals for expenses and revenue recognition? Are receivables under control and terms and conditions consistently tracked and enforced? Are payables accurate in your cash flow forecast? Are financial results predictable?(score 1 to 5)
Do you create daily or weekly financial dashboards and do all management review and discuss at least monthly? Do you use business intelligence to adjust pricing and margins seasonally or with the market? Do sales and work teams have KPI’s (key performance indicators) as feedback on their performance? (score 1 to 5)
Do you have and apply external resources for peak loads? Are these suppliers as good as you are? Can you schedule these resources far enough in advance to guarantee you can secure the best suppliers? Do they prefer to work for you more than any other customer? (score 1 to 5)
Are your incentive programs clearly understood and appreciated? Can employees see the connection between their good performance, the company’s results, and their individual incentives? Are commission plans designed to generate more profit and more business? Are all incentives reviewed regularly? (score 1 to 5)
Do you have a systematic approach to attracting and introducing prospects to your company? Are these prospects qualified during that process? Do you gather business intelligence about the customer before asking for their business? Does business development continue even when you are busy? (score 1 to 5)
Do you have a written plan for taking your products and services to market? Have you identified the verticals and channels that Business Development should target? Can you track the results of all your marketing efforts in terms of leads, contacts, and brand perception? Do you regularly connect with your customer base, issue press releases, and post in social media? (score 1 to 5)
Are customers and employees comfortable communicating with management? Are challenges and obstacles to success openly discussed? Is project information readily available to all team members involved in the delivery process? Do departments work together to improve overall delivery? When there are surprises, are they mostly things outside your control? (score 1 to 5)
Recruiting and Retention
Do you perform regular performance and pay evaluations? Are job expectations clear and progress tracked? Do you have a lot of unsolicited job applications? Do you hire good personnel even when there’s not an opening? Do great employees stay on board? Are poor employees let go in a timely and professional manner? (score 1 to 5)
Add up all your scores and multiply the total by two (x2). You now have a grade on a scale of 100. A score between 50 and 70 would puts you in good company, but with lots of room for improvement. Anything above 70 puts you at the head of the class. Anything below 50 requires immediate attention in order to stay competitive.
What is a great score worth? Companies that have CAGR (compound annual growth) of 10% or more in both revenue and profit over the past five years, probably did well enough on this test to score 80 points. Their current pipeline is solid and they are being “discovered” by new clients daily. Seasonal spikes are taken in stride and profits never vaporize after closing out a month. Results are consistently predictable and often better than expected. Employees are happy and job openings fill within days. These companies probably have one or two areas that they want to improve on and will act on those as soon as the problem is identified. Sounds great doesn’t it?
No one is perfect. If your score was in the 90′s, you are probably not being honest with yourself or your team – unless you happen to be the best at what you do. However, companies that really are the best rarely score themselves with 5′s because they are always aware of what needs to be improved.
If you need to improve in multiple areas, your question might be, “Which ones first?” One recommendation would be to focus on one area that you know you can successful in. Go for the win. However, many of these assessment points are inter-related. For instance, any progress will require a lot of management focus, but freeing up management time means getting many of these issues under control. So instead of trying to be best in class in one thing, work on several areas at once by focusing on common themes. For instance, improving controls and discipline in things related to accounting will help in several categories.