Are you a better driver because you can easily determine how fast you’re traveling, how much fuel remains, and what time it is? Are you more likely to safely reach your destination because you can readily see the compass direction of travel and because you’re immediately alerted to a loss of oil pressure or tire pressure? Does the dashboard improve your overall ability to travel efficiently and effectively? Would you be upset if the auto manufacturers decided to reduce the cost of their vehicles by eliminating all the instrumentation and alarm lights?
Now consider your business dashboard. Have you identified and do you regularly review your key business performance indicators (KPIs)? Here’s why every CEO should:
- Identifying your KPIs forces prioritization of data. The total data available can be overwhelming and you have to keep your eyes on the road.
- The correct KPIs provide a regular monitor of business historical performance, as well as the outlook for the short-term future. They enable you to stay on track.
- The habit of routinely reviewing your dashboard (KPIs) creates a powerful sense of having your “arms around your business”, regardless of how well or how poorly the business is currently doing.
- Your dashboard provides a jump start for when you need to:
- Create a long range business plan
- Create a marketing plan
- Apply for a bank loan
- Discuss the business with a potential investor
- Interview a candidate for a key position
- As a habit, your review of your KPIs is an excellent accountability tool for you personally as well as for your entire business.
You wouldn’t drive your car without a dashboard. Is it any less dangerous to drive your company without one?
Posted in Financial, Leadership, Planning, Strategy
Tagged Business Owner, Business Planning, CEO Development, Company Vision, Financial Planning, Goals, Leadership, Strategic Planning
In late August I participated in the annual conference held for the benefit of TAB facilitators worldwide. Since 2002, I’ve missed this conference exactly the same number of times that I’ve forgotten my wedding anniversary.
As in years past, I came away with several pages of prioritized notes listing possible strategies and tactics for improving my business. I accumulated these during the assortment of presentations, breakout sessions, and casual networking that takes place at every conference.
As I reviewed my trove of takeaways on the flight home, it occurred to me that I seldom hear from my business owner friends and clients about their awesome experiences at their industry meetings, trade associations, or professional society meetings. I’m thinking that’s because they don’t attend.
There is a tendency for an entrepreneur to start or acquire a business and then proceed to become so buried in the work that they cannot get away to sharpen their saw at an industry conference. This is a symptom of the “too busy working IN my business to take time to work ON my business” disease.
If you don’t participate in industry-wide sharing of ideas and practices, you’re starving your business. This business starvation condition presents as the sound of anxious breathing or wheezing. Unfortunately, in most cases, the source of that sound has proven to be the business owner.
Lesson? Stay connected to your broader industry or profession!
By the way, I’ve never forgotten my wedding anniversary.
I bought the dehumidifier in 1979, and it lived in three different homes over the years. When I finally decided to retire it, the machine was still working! That is, when I plugged it in, the compressor began running. If the temperature of my basement was below about 75 degrees, the coils would freeze up. The simple on/off switch no longer worked. The control knob for adjusting the humidity setting did not work. When running, it was very noisy and threw off a lot of heat. But it still removed moisture from the air when the conditions were right.
The new unit I bought 35 years after the purchase of the old one works better. It removes more moisture, more quietly, radiating very little heat, under almost all operating conditions. And I can run a hose to the basement sump for continuous draining. With the old unit I had to empty the bucket twice daily because the plastic hose connection was stripped long ago and leaked.
I know CEOs who, like me, stick with the old technology too long. The ancient computer operating system causes all kinds of interrupts and lost productivity. The phone system is cumbersome for customers as well as employees. The printer/copier/scanner still prints, although the paper feed jams regularly and the scanner feature has never worked right.
Inertia and penny-pinching sometimes combine to make us stupid. Running a great business requires relatively current technology. What’s your dehumidifier?
It’s not just lonely, but also unique at the top. You must hold yourself accountable for certain responsibilities that cannot be delegated to others. The challenge is that, if you’re like most CEOs, you also hold yourself accountable for many items that could indeed be delegated.
If you are buried in the weeds of your business 24/7, your business will eventually bury you. Yes, most CEOs must devote significant time to working within their business. But if you haven’t already developed the discipline of spending at least 2% of your time each month (about a half day) stepping back and working on your business, your business is likely to continue to run you rather than the other way around.
What are those unique accountabilities that only you can assume?
- Establish your vision of where the company needs to go, and communicate it clearly and frequently.
- Find and retain employees who can help get you there.
- Lead the creation and routine updating of company goals, strategies, and action plans that will help get you there.
- Protect the corporate assets (physical and financial) while making sure you are using them to help get you there.
- Assure that the various parts of the company are coordinated and working together to deliver customer value at a profit, and to help get you there.
In a sense, being CEO has a lot to do with attitude and perspective. Consciously accepting this higher level of accountability is a way of your ultimately exiting your business on your terms.
Why not keep score for a few months? Copy the list of accountabilities and keep them close by. Make a daily or weekly note of your estimated time spent in each of the five areas. Hold yourself accountable – or get somebody else to do so – for tracking how much time you actually spend on these important areas. Then make appropriate adjustments.
It’s been my experience that many CEO’s either omit or give short shrift to three major parts of their annual business plan. The first is how they wrestle through Critical Success Factors. These links between the upfront analytical sections of your plan and the downstream implementation sections provide a solid reality check against your objectives. They also force you to consider all reasonable alternative strategies for achieving your major objectives. Continue reading
In the holiday season just past, I often heard one of my favorite Christmas songs. The lyrics incorporate three questions:
- Do you see what I see?
- Do you hear what I hear?
- Do you know what I know?
While the poetry and melody surrounding the three questions are lovely, my mind occasionally drifts to the application of these questions to the life of the CEO. With regard to your employees, be aware that they do not see what you see; they do not hear what you hear; they do not know what you know.
This is an especially relevant point at the beginning of a new year. Continue reading
Have you ever thought about how important your understanding of motivation is to your success as a CEO? Consider…
Effective selling requires understanding why a particular customer is “shopping”.
Effective marketing demands effectively communicating why your company does what it does.
Effective leadership requires your understanding why your partners and employees get out of bed to come to work in the morning.
Most important of all, why do you put so much energy into your company? And how clearly have you communicated this purpose to your audiences?
The better grip you can get on why, the better CEO you will be. Suggested reading: Start with Why by Simon Sinek.