Sally, the owner of a gutter cleaning and installation company wanted a change. She said to herself, “for the first time in my life I want to relax, and not be so hands-on in my business. I want to enjoy the fruit of all my labor.”
She had put in 20 years of hard work in building her company into one of leading gutter cleaning and installation enterprises in her metropolitan area. Sally, who was in her mid-40’s, had fully systematized her company, and now was ready to move on to maintaining what she and her management team had put in place.
From working with us she knew that to do this they needed to implement a system to properly manage her company. This would involve identifying key performance metrics, tracking them on an ongoing basis, and putting in place the necessary corrective mechanisms to respond to any metrics that could go off course. In this way, she and her managers could oversee operations without having to be submerged in the company’s details.
Preparing A Company To Be Easily Managed
Just like Sally, you may be saying to yourself, ”I want some freedom from my company, I want to enjoy the fruit of all my hard work, and to have a business that if I wanted to, I could manage from the beach”.
You want it to continue to thrive, but you just don’t want to have to spend all your time down in the trenches of your company. In other words, how can you create the business of your dreams, the one you long for? The following described steps are all part of our Structure of Success™ methodology and are identified in the below diagram.
There are five steps to accomplishing this:
1. First and foremost, you need to properly, and fully systematize your business. You want to particularly focus on the parts of your company that interact with your customers. This will result in perfecting the systems that are required to produce your business’ product or service.
Besides making your company much easier to operate, a fully systematized company becomes a hugely attractive feature to a potential buyer. This will increase its value in the marketplace and make it more alluring to a potential purchaser. I discuss this in the article titled “Good Morning, How is Your System Doing Today?”.
2. Next, because your personnel and the systems they use are key to the future of your business, to enable your company to achieve your Vision for it you want to determine what your future organization needs to look like in terms of its systems and personnel. I cover this in my article Addressing Your Future Staffing Needs.
3. Then you need to realize that how you produce your product can actually be more important than your product itself. This will totally change how you view your company. This concept is explained in How You Produce Your “Product” Is More Important Than Your Product.
4. Thereafter, you want to view your business as a product “sitting on the shelf” for someone to buy. This will lead you to focus on ways to make it more attractive to a potential buyer. This game changing concept is detailed in Making Your Business The Best It Can Be.
5. Lastly, to provide the enduring freedom your desire, you want to properly oversee your business’s operations and manage it via metrics.
If you do these things, you will create the company you desire, and as a by-product become a world-class leader with a fully and properly organized company. That will in turn maximize the value of your enterprises by creating an economic system to produce your product.
Oversee Your Business’s Operations And Manage It Via Metrics
Drilling into Step # 5, once you have systematized your business (as described in Steps 1-4), having the appropriate metrics in place and responding to the metrics that may go off target is key to operating a company that it is not a burden to its leadership. The benefit of this is that upper management can oversee the operations of the business by monitoring its metrics without having to be immersed in all the nitty-gritty details of its operations.
Identifying Your Core Metrics
In my article titled, “Are You Utilizing this Business Planning Tool to Transform Your Company?” I discussed metrics in detail, including how many metrics your company should have. The question I would like to focus on now is how many metrics should you as abusiness leader track to manage your company? Studies have shown that the maximum items a person can effectively track and be responsive to is 10-12.
I recommend you identify 10-12 core metrics that will give you the most comprehensive view of how your company is operating and review them daily, every other day, or at least weekly. I cannot imagine not monitoring a key metric at least once a week. As I discussed in “How Can You Really Know What is Going On Inside of Your Company?”, a digital dashboard is a great software tool for monitoring your metrics.
A digital dashboard displays data from your accounting system, processes used to operate your company, and other sources by using graphics, charts, gauges and other visual indicators. It enables you to monitor your organization’s performance by displaying your key metric values, projected amounts, and historical trends—all in real-time.
In this way you can easily keep track of and, if necessary, take action on the operations of your company. When you couple this with the usage of Quality Loops, you can establish a company that is a breeze to operate.
Monitoring Your Metrics
Let’s look at how Sally identified the core metrics that would enable her to effectively oversee the operations of her company, without being overly involved in its daily activities. In her case, first she reviewed and analyzed her company to identify the measurements that would offer the most comprehensive view of how the business was functioning.
This involved looking across her entire Marketing & Sales, Production, Finance, Personnel, and IT areas to identify 12 core metrics for managing her business. Three of them were: daily number of sales inquiries, number of completed gutter cleanings per day, and gross amount invoiced per day.
Next, she accumulated and reviewed the data from these 12 Metrics on a daily, weekly, and monthly basis. Lastly, Sally had a digital dashboard created for easily monitoring these metrics. In a similar way, each of her managers identified their key metrics and started monitoring them on a daily, weekly and monthly basis. As a result of these actions, Sally and her management team were able to effortlessly track and then take appropriate action regarding their ongoing operations.
Where to Start
Begin by reviewing and analyzing your business to identify the 10-12 measurements that provide the most comprehensive view of how your company is performing. Make sure you consider all the areas of your enterprise, including Marketing & Sales, Production, Finance, Personnel, and IT areas. Next, accumulate and review the data from these measurements (Metrics) on a daily, weekly, and monthly basis.
Then, develop a digital dashboard for easily monitoring the metrics. Thereafter, put in place Quality Loops so your employees are empowered to solve issues themselves and your managers can be relived of having to micro-manage their personnel. Lastly, consider having each of your managers go through the above steps for their area, and then have them monitor their metrics on a daily, weekly, and monthly basis.
If you need assistance with managing your organization via Metrics so you could operate your company “from the beach”, please contact us using the below information so we can guide you through this all-important process.
Fountainhead Consulting Group, Inc. is an Innovation and Business Growth, Scaling, and Planning firm. During the past 21, years we have shown over 1,200 companies how to achieve their goals by using our unique, comprehensive, and systematic FastTrak Innovation Program™,Innovation Academy™, and Structure of Success™ methodologies. Using the components in these methodologies, each month we examine an aspect of how to transform your business or organization into a true 21st Century enterprise.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.