How to get information flowing to you before you need it.

measure quote.jpg

Do you find that you’re always searching for information? That you never seem to have it at your fingertips? That the information is in someone’s head or it’s in a report somewhere?

 

It’s usually never where we need it. It’s missing and thus doesn’t guide you when making decisions within your business. As a result, you are reliant on what other people tell you, which is always from their perspective affectively managing your business on opinion, without analyzing the facts.

 

So, many business owners are trying to run their business without this fundamental in place. Having a balanced reporting wheel operating in your business will enable you to make informed decisions with a single sheet of paper, maybe two. Sounds good and it isn’t that hard.

 

There are 4 things you need to consider when building reporting into the business:

 

1. Know what information is important.

 

Knowing what you need to measure is crucial. Being able to distil and identify the critical trends, anomalies and themes from the tons of data being tracked or inputted on a daily basis, is the difference between being able to respond quickly and effectively and a poor result.  So why doesn’t everyone do this?

Because most people fall into one of four camps:

 

1.    Paralyzed by the vast amounts of information and not sure what to look at

2.    They look at the reports that they are comfortable with or that their team provide and they provide no real insight

3.    They don’t know what they should be looking at or they have no reports

4.    Why would you need a report to know what’s going on in the business?

broken coggs.jpg

 

 

Once you identify the right information to look at within your business you can focus and monitor the key information knowing that this creates the greatest impact. Yes, you will need to monitor other information but right now let’s focus on the 20% that makes 80% of the impact.

 

So how do you identify what the key indicators for your business are?

 

Answering the following questions should provide you with the information to create your reporting. You can always add to it or remove data until you get the key information:

 

What are the most significant (largest impact) drivers within your business that impact your result?

What are the most important financial outcomes for your business? Is it sales, profit, number of clients etc

What factors influence this outcome? Prioritize them based on the impact

What if any areas within your business are volatile and need to be closely monitored?

Which area within your business if it declined would impact your overall financial goals most significantly?

What are all the activities that influence that result?

What activities within your business have the biggest influence on either costs, customers, sales or profit?

Are there any areas that are impacted by external factors that you need to monitor? 

Are there any compliance or legislative requirements that you need to monitor?

 

Once you have your measures then you need to make the reporting simple and easy for you to identify abnormalities or discrepancies in your business.

 

The easiest way to do this is to have a comparison and format the report so the result appears red if it is outside your acceptable norm and green if it is within. This way you only have to manage the red and celebrate the green.

 

So it is important to consider the time period that you use to analyse the data. Are you comparing apples with apples? Is the time period always the same?

 

Questions:

What time frame should I be looking at?

Should I be reviewing the current result against another milestone? eg last year, last month – which will give me the greatest insight into the current and future results.

 

The key measures are different for every market, industry and in some case business. It could be lead generation, customer satisfaction, revenue, number of customers, or else. Whatever those measures are that dictate the success of your company, that’s the information you need to have available at any moment. It’s what you need to create reports on.

 

 

leading-lagging-indicators.png

 


 

 

 

 

2. Lag and Lead measures.

 

The next step once you have identified your key result indicators are determining how you are going to measure them. There are two types of measures.

 

A lag measure, which is the outcome, the actual result. It’s accurate, factual and easy to measure. Most businesses use lag measures for all their reporting. I would like to introduce lead measures and their value to your business.

 

A lead measure, is reported on a more frequent basis than a lag measure and it indicates the likelihood of achieving the outcome (lag). That makes it predictive. A lead measure enables you to change tack, make alterations or adjust your activities whilst you are still within the timeframe. By monitoring lead measures as the business leader, you are able to forecast your results in advance of achieving them and proactively make changes in the period rather than waiting for future periods.

 

Let me give you an example. If we’re talking about revenue, a lag indicator would be the months revenue budget or target. Once the month is over you know with accuracy that you have achieve it or not.

If you miss the budget number, though, there’s nothing you can do to change the result. All you can do is make adjustments next month.

 

When you introduce a lead measure in that same scenario, the indicator could be number of sales calls made in a week. Why? Because the more calls you make, the greater the likelihood to make more sales. It’s a numbers game. Or the lead measure could be the % of clients that have pre-bookings already confirmed for the week.

 

In certain circumstances, the lag and lead measures can appear to be completely separate from each other. If the lag indicator was % of return customers to the business, for instance, then the lead indicator could be employee engagement. There is a direct correlation between the two as it has been scientifically proven that happy and engaged teams demonstrate more discretionary effort and provide better care of their customers. The two are linked but the measures are reported in different departments one in HR and the other in Marketing.

 

The key is to identify the key outcomes for your business and then measure the activities that your team do that influence this outcome using both lag and lead indicators.

 

 

 

lag and lead.png

 

 

 

 

 

3. Balance counter metrics.

 

Everything we do within business is in a fine balance. This is no different in reporting. Too much of a good thing is never good, too much chocolate makes you sick the same for too much focus on one metric in your business. Looking at a combination of metrics, to determine your areas of attention and focus. the balance can be lost when you focus too much on measuring one indicator, to the detriment of the others.

 

The best example here is the dance that happens between gross profit and revenue. Both these outcomes impact each other. Increase your gross profit and your sales organically increase. However, there is a point where if you increase your gross profit through price increases your sales will start to decrease. It is important to measure both the primary indicator and the secondary metric until you find the balance where you are achieving the maximum result.

 

The watch out here is metrics drive behaviour positive and negative and they can drive unintended and unimaginable side effects. It is important when creating reporting metrics that you consider the potential behaviours that will result from focusing on key areas and create a counter metric to ensure that you achieve the maximum possible outcome. Constantly reassess your outcomes and reporting and adjust the focus to align the behaviour of your team to achieve the outcome. Investing your and your team’s time and energy into one area, or relying heavily on one metric, can and often dos result in a shift in behaviour and a flow on impact to results in another area.

 

If you are chasing growth in one area, identify the counter metric and report them together so that your team identifies the need to achieve both together not one to the detriment of the other.

 

 

 

4. Balanced Reporting Wheel

 

All companies that have reporting, have financial reporting. One reason is that the tax office asks for all kinds of statements to refund you money or ask you to pay a bill. It’s necessary to manage your business and maintain cash flow which is the life blood of business. If you don’t have money coming in then you have a very expensive hobby.

 

However, finance is not the only area with metrics to report and measure and it’s not the only thing that needs your attention. A healthy business measures the key outcomes and activities across all areas and has targets and budgets that enable the roll up to achieve the businesses strategic goals.

 

Measuring activities enables you to see how they are performing and ask questions to get them back on track or to identify learnings that can be adopted in other areas. It also enables you to measure the success of the strategy and the execution of it be it over the entire business or a business unit. You are able to measure the performance of the team and set benchmarks, internally or industry standards to drive greater performance.

 

Having a balanced reporting wheel means that you have a holistic view of your business, you are able to make decisions that impact the entire business with a global view of your business rather than a single focus.

 

 

All the departments or areas within the business come together to achieve the overall outcome and when you create reporting within the business that addresses all areas you increase your ability to make effective and timely decisions and eliminate the emotions and perception of the team as you are measuring tangible data.

 

 

 

Creating reporting in your business can sometimes feel overwhelming, with so much to consider but with these 4 tips you will be measuring and managing your business success in no time.

 

 

 

 

 

 

 

 

How to create decision making in your business

businesssuccess-675x456.jpg

 

Do you feel like you’re the only one making decisions in your business? And does it often feel like no one thinks for themselves?

 

That’s a common scenario for business owners these days. While it might be hard to notice it in the early days, over time it can get worse. Meaning, you might end up being the only person in the company thinking about solving problems. This if left unchecked creates dependency on you for every decision, even the simple small ones. Requiring your time and taking you away from other areas within the business that need your attention. Your time in no longer your own.

 

You’re not alone in this. So many other entrepreneurs, regardless of how big or small their business is, are struggling with the same. There’s so much you need to be thinking about in every moment, and all aspects of your business need attention, that it’s easy to overlook the fact that you have created an environment where decision making and thinking is your job and is something you do on your own.

 

Once you become aware of this, however, it’s time to take action.

 

I want to share with you 4 practical steps that I’ve learnt through my career that may help you empower your team to think for themselves and bring decision making back into your business.

 

The main reasons why you need to do that are the following:

 

-    When everyone defers to you, you become a bottle neck and slow the entire business down;

-    You are involved in every decision and nothing can operate without you;

-    You are limited by your knowledge and expertise and involved in the most basic and/or unimportant tasks;

-    You are an employee, not the CEO;

-    It’s easy to come to a wrong conclusion, or take less effective decisions, if you’re only relying on your opinion, experience and perspective.

 

When everyone starts taking responsibility, thinking and creating solutions, you unleash the innovation within the business and that’s beneficial to everyone involved.

Here’s how you can start making better decisions in your business, be a great leader, set your people up for success, and see progress sooner:

 

 1. Create systems for clarity.

 

Have you created efficient and effective work processes across all areas of your business? Are these documented? Do your team know what they have to do and how they need to do it? Do you have specific steps and actions to be taken for each task performed by your employees, so that it takes less time and effort and can be done consistently by anyone?

 

If your answer is ‘no’, then you’re slowing down your business growth and reducing your productivity. Documenting processes are not the sexist part of running a business but if you want to grow they are the enabler.

 

Systems and procedures are necessary for every company to not just grow, but also exist. Without them, the work is chaotic, the environment doesn’t breed productivity, performance is inconsistent, training is haphazard and outcomes are dependent on individuals rather than processes. People need constant training and handholding. That requires your attention too, when the same can be dedicated to better areas that will grow your business, such as strategizing, networking, and finding clients.

 

Once you grow bigger than just you, you need systems to get the information out of your head and into your teams.  Each of these must be well-thought-out, tested for accuracy and pain points, frequently updated according to changes in your processes, industry, or new technology , where possible they should be automated.

 

So, if you haven’t yet got to the point where you take a closer look at your workflows, now is the time to do it. Set time aside to document your current procedures. You do have them, but chances are they are in someone’s head. Therefore, everyone does it slightly differently, achieving different results that aren’t effective or consistent. Find the pain points, and eliminate the gaps that lead to individuals having to make independent decisions. Create consistency for your team, clients and your market.

 

Once that happens, your ongoing time investment will be in training, continual improvement, coaching and managing exceptions, not fighting fires. You are continually evolving your processes to improve your offering to your clients.

 

2. Escalate your team’s level of thinking.

 

Most people are hired to perform a certain set of tasks within a system. But if they aren’t familiar with the bigger picture, where their process fits into the strategy, there might be misunderstandings, and time has to be invested from you. Into work that could be done quickly, problems get drawn out waiting for answers, the end result is frustrating for you and the individual as well as reducing productivity for the business.

 

The main problem occurs when everyone on your team is operating at a task and a process level, and their thinking is focused on following the next step.  So, if there is a gap in the process they need to stop and ask themselves if they’ve performed the same task before, try to remember how to handle it (and wonder if they had the knowledge in the first place) and what was the answer last time. Unfortunately, when the systems aren’t well structured, it also means these same employees won’t have the necessary information in hand, so the decision will be delayed and they’ll need to come ask you.

 

With some business owners, these occasions are just an exception. But in other cases, it’s something that occurs all the time.

 

It’s like you leave a note asking someone to go to the shops and buy groceries for dinner and you don’t tell them what your planning to cook. They will either come back and ask – wasting valuable time or decide what they want for dinner and creating frustration for everyone.

 

We do this to our team all the time and wonder why they make the wrong choices. Most people blame the employee but if we had just had the foresight to remember that people can’t read minds then the situation could have been averted.

 

It takes more time in the beginning to explain why and link the decision to the business strategy but overtime and with consistency your team will start linking their questions to the bigger picture and be able to make sound decisions. Imagine how many hours are lost weekly just because of such inconsistencies?

 

What can you do? Escalate your team’s level of thinking.

 

There are three levels of thinking WHAT, HOW and WHY – if you give your team all three of these levels for the tasks that they complete they will be able to create context or their questions and as a result make sound decisions.

 

They need to know what process they are completing, how they need to complete it, as well as how it fits into the overall strategy and why it’s important. This will enable them to analyze not just the task in front of them, but also be able to quickly come up with the next step in the process without asking anyone else and thus making this take longer.

 

Are your employees are only asking themselves ‘What is the next step?’, If the answer is yes then you have missed ‘Why?’ and ‘How?’

 

You are effectively giving employees the context for their role so that they are able to determine what is important about the activity, before they proceed with it.

 

Motivate and engage your team to understand and contextualize the ‘why’ behind anything done in the business and how it fits in the bigger picture.

 

3. We learn through mistakes and they move us forward.

 

Can you remember a time when you made a mistake and how it was handled? Did it encourage you to try again or to never voice an opinion or risk anything anymore? Usually, we default to the latter most people criticize quickly and praise slowly.

 

What happens when somebody makes a mistake in the company? How do you celebrate that? Yes, I said celebrate. Celebration and making mistakes in business are closely related, environments where making a mistake and trying again is encouraged leads to better decision making, innovation, continuous improvement and engagement.

 

If you’re criticizing your employees - directly or indirectly, for having a go, for risking something, for trying something new they will default back to not trying to not saying anything and you are back to making decisions on your own again.

 

As humans, we all have a need for certainty in our environment, the ability to predict what is going to happen, this isn’t psychic powers, its having control over our environment, knowing the rules if you like.

 

If you ask people to try something new, or give an opinion and then you criticize them for not getting it right. Chances are they won’t try again they will default to security of not answering and not being criticized.

 

If you want decision making and innovation in your business then you need to create an environment where people feel safe and encouraged to make mistakes so they can learn.  That’s much better than having a team of people afraid to test things, to take action without asking, or to do anything at all as it might lead to failure.

 

The best advice for creating great company culture is to reward your employees when they make a mistake. When that happens, talk to them and pick their brain on how they came up with the solution they thought was right and help them to identify other things that they could have considered.

 

4. Don’t share your opinion first.

 

Here’s the harsh truth: your opinion kills collaborative decision making and thinking every single time. It also stops people from taking accountability for the situation.

 

When you walk into a meeting and express your opinion, it becomes the baseline of what everyone works with. Some may agree or disagree, but most won’t say anything. However, all will accept it as the starting point of the discussion and most will act upon it as if it was an instruction.

 

Different opinions lead to diverse discussion, solutions to problems, and multiple options when facing a challenge. This brings different perspectives to the discussion and enables people to build on suggestions together.

 

A simple change in your approach can have dramatic impact. Simply don’t share your opinion first. During a meeting, or even when talking to an employee virtually or face-to-face, ask them what they think. This gives them the opportunity to think first and voice what they are thinking and gives you the opportunity to listen and consider an alternate view. You can then ask them questions to understand further and make some suggestions on what else they may need to consider.

 

If you need to give your opinion, give it last. That way you have all the options on the table, rather than limiting and containing the discussion. Then casually share why you have come to the conclusion that you have. Make it a friendly conversation and let it be a win-win situation. I wonder, how often if you try this approach that your opinion when shared is different to your original opinion.

 

If you want to take this further, don’t share your opinion at all. Listen to the feedback and ideas of everyone on the team, then ask even more questions to see how they came to that conclusion and what makes it practical. This gets them thinking even more and creates collaboration.

 

Conclusion

 

That’s how you get others in your business to take decisions even if you’re not there, and how you help the company move forward and prosper. And in the process, you create more time for yourself, an engaged and passionate workforce that share their opinions and perspectives, and a business that is innovative and growing.

 

If you found these interesting and want to implement them into your business, do not hesitate to get in touch with me. I’m here to help and can’t wait to see your business grow.

canoeing.jpg

Understanding energy types & using this to improve your relationships

Everyone has a natural state where they exhibit their 'preferred behaviour'. It's how we are when we feel most comfortable and as a result it takes us the least amount of energy to sustain, it's easy ... natural. It's a default way of being that is most natural to you. 

blue butterfly.jpg

Understanding what your natural 'energy type' is and the behaviours that you exhibit will help you to have greater awareness of how you interact with others and how you naturally communicate and think, its like being able to read the computer code for how you are.  

There are four energy types: 

  1. Dominant - People who focus on the big picture, makes decisions quickly, they are efficient and effective and very focused on outcomes and winning. They like to be leaders and take charge of situations
  2. Influence - People who focus primarily on relationships and connection with others in everything they do, they like to be the centre of attention, big picture, having fun, they are fast paced and are usually emotionally intelligent  
  3. Steadfast - These people are more reserved, happy to be supporting behind the scenes, they like processes and procedures, details and consistency , relationships with others are important, they like people to get along and are very nurturing
  4. Compliant - These people who focus on detail, ensuring accuracy of information and getting it right. There is no room for error they are usually experts in their area, reserved and like to be left to their own devices to get the job done well.

These are very distinct ways of behaving and each group has a particular way that they communicate to others.

Understanding how you fit within these categories, what the patterns are that are unique within each group, as well as the energy types of those that you interact with can unlock a new world. Once you break the code you are able to understand why people fail to understand what you say, why some people seem to just get you and you them and others are just hard work. It's not a personality clash - Its a different energy type, its like talking a slightly different dialect of the same language, sometimes the words have the same meaning and sometimes they are completely different. 

Consider these benefits: 

  • How easy would it be to negotiate and close the deal if you understood how a person makes decisions? Eg. a dominant energy type will need the big picture strategy and the outcome , they will link the rest providing it meets their criteria whereas a compliant energy type will need all the details, time to analyse the data consider all the possibilities before being in a position to negotiate at all.
  • Easily avoid misunderstandings and frustrations by modifying your communications to meet the preferred style of the people you are interacting with. 
  •  Encourage and motivate your team to outperform and exceed KPI's by talking to them about things that are important to them and in their preferred 'language'.  

If you're interested in understanding what you're natural energy type and how it influences your performance and impact on others contact me to book a behavioural profile for you and or your team.

Is it really people first for your business?

Alignment of your thinking is key to business success

When was the last time you challenged your thinking on your business. If you're a start up or even an established business, do you put people first? Truly put them first not in words but in action? Most leaders and business owners say they do but in reality its just words that fall away or get conveniently by passed when it comes to the reality of making money.If you have, are you seeing the results you want from your business? 

There are four key elements you need to consider and ensure are implemented in your business to be truly sustainably success in business.

1. Environment

Environment is the big picture. The why behind what you are doing. It covers your purpose and values and is often expressed as your mission as a business. It covers the culture of the organisation the standards that you have for yourselves(the company and employees) and for your customers. Your values and your strategy. 

2. Structure

Structure covers the process and procedures, operating manuals, benchmarks, systems and sequence of events within the organisation that need to happen to make sure your business functions at maximum efficiency. This is the how things happen, the engine room of the business get this right and you have consistency and you and everyone knows how things happen.

3. Implementation

Implementation is where the action happens but it's more than just doing. This is where the measurement of your activities will happen and KPI's are set to achieve the benchmarks set in the structure phase. This is where the results happen, execution of the strategy through the systems. This allows you to determine what great looks like for your organisation. Most organisations start at implementation and spend all their time doing, working in the business this is often where reliance on particular people occurs. 

4. People

Setting the team up for success, ensuring that they have the support to be successful in their role and are able to contribute to the company and to the other members. That they have the coaching, mentoring to develop in this role and future roles. Ensuring that who is doing the role has the support to succeed. People need to be considered at every step in the model both customers and employees to ensure the company operates smoothly. If you have problems with people then you have problems at the stages above environment, structure and implementation. 

People come last - why? Shouldn't they come first yes which is why they come last in this model so they can come first in the business. Confused let me explain.

You need to determine all of the other stages first to be able to recruit and set the right people up for success. To do this you need to know your values, your culture and your strategy to make sure that the individuals are aligned and why the company does what it does is meaningful to them.

You then need to understand how the work is done what skills are required, technically, processes and how they work across departments, divisions and then what is done People are those that drive the structure and implementation of your business. Then comes what work is done. Without reviewing, considering and analysing all of these stages you are likely to hire the wrong person, provide inadequate training, create challenges for the individuals as their skills don't meet the role or fit with the organisation. 

To help explain how these four elements interact together in the critical alignment model, consider how a house is built. 

Consider the foundations of a house (the environment) as the plan, it has the big picture what you are trying to build and how you are going to do it - the style , size, location, purpose etc. Without a good plan that defines this problems start right here, assumptions are made, different people have different interpretations.  You need a strong environment, otherwise structurally the house, the fittings will be inconsistent and you could hire the wrong experts creating problems and weakness. 

The first thing you build is the slab, using the plan as the blueprint and guide next you build the floors, wall and roof, which is the structure in our critical alignment model. This holds everything together if you make a mistake here it is a big problem that impacts everything. 

Then comes the painting, carpet, appliances, lights etc which is the implementation stage in our critical alignment model, again at all times you need to refer back to the plan and to the structure to make sure that the style is consistent and that it is functional. 

The last piece is that the people who live in the house are able to move. That the plan enables them to live in the house and operate functionally in a house that works for them. It is in the right location, has the right number of bedrooms and is aligned to their purpose. 

Without all of the above in place, you don't know which people you need to target or market selling the house to. Are you trying to market a family to a apartment for professionals or a house with stairs to an elderly couple. You change your marketing to match the house not change the house to match the marketing.  

If you need to objectively work out where your problems are coming from not where they are being felt. If you know that you need to make changes within your business but not sure where or how to address it. Contact me to discuss a health check for your business. So we can pin point the problems and create, tailor the solution. Most people just don't know where to begin