Measure So You Can Manage

Having the right performance metrics helps you drive growth. Let me share with you six steps to implement effective measures to manage. Keeping a competitive edge in today’s marketplace requires ongoing investment in the transformation of your business. As Mark Twain said:  To stand still, is to fall behind.

1)      Clearly define your corporate goals

Without a clearly defined and documented strategy, it is impossible to set expectations and monitor performance. You can only manage what you can measure, so if you lack such a strategy, begin to brainstorm and evaluate opportunities for continued growth.  Understand what your weaknesses and strengths are and begin documenting so that when it is finalized, you can share it with your employees. You may think that everyone knows where you are going, but don’t’ assume.  No one has ever over communicated!

2)      Identify short-and long-term operational goals

Take your strategy and identify what you want to accomplish short-term (3 mos) and what needs a bit more time (12 mos).  This would include approaching the weaknesses and turn them into strengths. In operations you want to evaluate each step taken and whether it adds value or not to the final product or services.  Think lean here and optimize the process.

3)      Establish milestone, deliverables and tasks to support your goals

Now you may be ready for the roadmap.  Establish milestones, deliverables to be achieved and identify tasks and who performs them.  Now that you have documented and shared the strategy with your employees, it is important to listen to them and get their input.  Agree on goals, objectives and timetables.  Evaluate whether you have adequate resources, so you have a better chance of succeeding.

4)      Develop and implement metrics for all key activities

This is where the measuring starts. Make sure you engage your employees in setting performance metrics.  Here are some examples: Customer retention rate, supply chain rate of return, funnel conversion rate or call center support metrics. Be proactive and pay attention to leading indicators in your industry and pay less attention to lagging ones.  Clarify expectations with your executive team and staff, empower your employees and boost their engagement. Set some incentives in advance and make sure that all metrics are objective and not subjective.

5)      Monitor progress and make improvements as needed to stay on course

Now you have a roadmap in place that you can begin to monitor and manage. Your employees understand what is expected of them and how they can help the company grow.  Making a difference goes a long way in terms of talent retention.  There needs to be purpose and connection to the larger scheme as participation can give them a better understanding of how they personally can affect the business.

6)      Assess the effectiveness of metrics and modify if necessary

Close the loop by evaluating regularly how the metrics are working.  What is the assessment of your staff and how well are they adhering to these metrics?  Do you need to change them, are they giving you information that is meaningful to the future of your business?

Start the conversation today regarding how you can drive results with the right performance metrics. Transparency and accountability will be on your side as you seek a way to measure and manage. This is an ongoing process and of course, if your business changes, so do your performance metrics.

My book “Stop Compromising” has its own chapter (chapter 5) on this topic and explains ways to think about KPIs and performance metrics.

Let me know what KPIs and performance metrics have worked for you and what particular leading indicators you use for your roadmap.

 

Work Horizontally

Why working across departments adds value to your bottom line…Logo

As you grow your company, one of the pitfalls is that departments slowly but surely form into silos. Once that silo mentality is established, it is harder to break them down. A big piece of this is failing to recognize the importance of the interdependency of the various functions or departments. Working horizontally begins with the CEO who understands that the four business elements: Sales, operations, finance and the organization need to be on the same page in understanding the critical challenges of the company.

Collectively the four business elements are the engine that makes your business run. Each relies on the other three and if one is underperforming, it drags the others down, hence the interdependency. Working horizontally also implies that each business element understands what the other three need. Rather than compete internally for your budget dollars, lead them to a more collaborative approach where they view themselves as a service internally to the other departments. This is where the alignment of course comes in and is so important.

Clearly share and communicate your strategy with the department leaders. What are the opportunities to grow the business? Minimize risks and simultaneously increase the value of the business. Create a culture of continuous improvement.
How can each business element contribute to continuous and long-term improvement? The collaborative effort will help you uncover key business issues facing your company. Today’s market is swift and trends and competition change at a faster pace. Teamwork, communications and collaborations are essential to run your business in an agile fashion.

So begin your journey by focusing in transforming your business with Best Practices, step by step. This will be vital to your company’s success and profitability. For a start here are the Best Practices areas and questions to ask yourselves:

Organization: Culture set for change through leadership, culture and communications.
Have you clearly defined your mission, vision and supporting core values?
 Have you set key metrics to measure well-defined growth objectives?

Sales: Business market assessment and related risks in sales, marketing and business development.
Do you have a well-defined process for collecting and analyzing market                                    intelligence for potential growth opportunities?
 Do you gather customer requirements and measure customer satisfaction?

Operations: Growth and operations strategies in the areas of manufacturing, R&D, distribution and business services.
Do you have a written strategy for continuous improvement?
 Have you identified scalability issues of existing resources?

Finance: Your overall financial health in terms of finance, IT, risk management and capital raising.
Do you include in your financial reports an analysis of contribution margins for                      each of  your business segments?
 Does your finance team meet regularly with other departments to understand                        their needs?

Having procedures and policies in written form and shared with employees is another important step. Working horizontally in a collaborative manner will bring you great results. The era of silos is the thing of the past and letting each department run their own show will hurt your business. Starting with a benchmark assessment around best practices is a good start. Focusing on continuous improvements and empowering your employees to find efficiencies and drop anything that is not a value add to the customer will affect your bottom line in a positive way.

My book “Stop Compromising” has its own chapter on this topic and includes a benchmark assessment around the four business elements

Let me know what has worked for you in working across departments and in leading with a collaborative style! Did you see a direct result on your bottom line?

How to Create Value

Create ValueCreating and building value for your business is something you want to bring up high on your agenda and at an early stage of your business! Of course, but…“generating value is one of the most misunderstood tools of innovation” according to Fast Company. Why is that?

It may well be that it’s a misunderstood concept. So how do we define value creation? It’s aiming towards best practices with an ongoing focus on continuous improvement. Value creation is something you create both internally and externally with a heavy focus on customer services.

We also know that value creation directly correlates with the future valuation of the business. The external customer focus, something that a business owner relates to, is a necessity if you want to stay ahead of competition. However, the internal focus on value creation often falls short to the detriment of the future worth of the business.
So again, why is not more emphasis put into this part of running a business? In my experience, the CEO or business owner fails to make the time to work ON the business on a regular basis. Another reason may be that you don’t have enough resources. Maybe you are managing instead of leading and are running out of time. We also know, just like with any new technology or software, you have to invest in an upfront effort to plan and execute accordingly.

Improving organizational capabilities is an intangible aspect of value building. This activity examines its own leadership, talent, accountability, collaboration, speed, mindset and learning. It is a longer term view and effort. Getting your ducks lined up just before you are ready to sell, or transfer the business over to a family member, is going to be too late. Value creation happens over time and is continuous.

Let me share with you a big picture view and a starting point in how to address the Value Creation Process and how you might begin the process. Start with these three disciplines:

1) Operational Excellence
a. Efficiency
b. Streamline Operations
c. Supply Chain Management

2) Product & Services Oriented Leadership
a. Strong marketing and innovation
b. Dynamic Markets
c. Development – short time to market with high margins

3) Customer Intimacy
a. Exceed Customer Expectations
b. Tailor Products and Services
c. Deliver on time

Behind the three disciplines listed above are no doubt a lot of details. Let’s assume you have focused on customer intimacy (3) and it is well established. If not, create a benchmark or baseline around these activities and set a new standard so you remain competitive. Operational excellence (1) and leadership (2) is where many companies fall short. The art of business is to balance both external and internal value creation over time. Planning these activities is essential and will take some time and effort, however, no matter what your next stage, it will be worth your while.

I know as the leader of your company your demands are never ending. Begin your process one step at a time, just like writing a book, one chapter at a time. Begin to identify the low hanging fruit, something that is easy to fix and has the most positive outcome. Maybe it is shortening the number of phone rings for a receptionists. Achievable with immediate positive outcome for you, the employees as well as the client or vendor.

If you find your business experiencing a reduction in market share or have difficulty in keeping costs down and you are doing it all alone, consider an outside group of advisors by establishing an Advisory Board. More private companies are investing in creating an Advisory Board to help them with their strategic intent and guidance in how to plan and implement such goals.

I hope this is a good first step for you. Begin to work ON the business for at least 4 hours a week (in one block) and things will begin to happen. I will be speaking on the topic of Value Creation and Finding the Right Advisors in the next two weeks. You are more than welcome to attend.

My next blog will be on “Working Horizontally” discussing how to aim for organizational collaboration addressing the first discipline of this blog. If you want to receive these blogs directly, please click the button on Follow Rudi’s Blog.

Make comments on this blog or get in touch with me with any ideas or thoughts. You can find my contact information on my new website Stop-Compromising.

With gratitude, Rudi

I am back with a book!

Front Cover Book

A year ago I wrote a blog on Transform, Transition and Change.

I  have missed engaging with you, and yes, it has been a busy year!  Looking back I accomplished some of the goals I set and others are still incomplete! Maybe as a reader you affiliate with this dilemma?

All three actions above have affected me in a very positive way.  I am very proud to announce my newly published book. It is available on Amazon if you would like to purchase it.

It would mean a lot to me if you would take the time and write a review.  See Sample Quotes for Rudi you may want to incorporate at the bottom. Either way, send me a line or two with your feedback and what you think.

The book is written for CEO’s as an instructive business guide that leads them through the myth of finance. Providing a fiscal navigator to embrace operational finance more positively, it’s a holistic perspective to overcome typical business challenges and to experience sustainable growth.

The book now has a dedicated website Stop-Compromising where you can find more details about the book, speaking ideas and board role qualifications, all part of my transition to Business Advisor, Thought Leader and Board Member.

Let me know about your transformations, transitions and changes. Call for getting together over a cup of coffee or send me an email at                                                            stop-compromising@nextstagesolutions.com

A-Team Outside the Box

Outsdie the boxYour ‘Outside-the-Box’ A-team

Every business has its challenges, yet most private companies do not engage a board of advisors. So let’s look at your options a little more carefully to see how you might want to set up such a board. Creating an Advisory Board (BoA) is making use of a group of outside experts, in other words, an “A-Team outside the box”! I am playing a bit with words here, but I want to emphasize that you should try to think unconventionally and gain some perspective by adopting an approach that’s essentially “outside your business.”  Have this group bring you business knowledge that you don’t currently have access to, information of the sort that will encourage profound questioning and probing.

An advisory board will provide you with non-binding strategic advice. This option gives you greater flexibility in how you might structure and manage this group than a traditional board of directors. Your selection of senior-level business leaders, experts and thought leaders to serve on your BoA will be very important. It might be easy to ask your accountant, lawyer or best friend to serve on your board, but that will be a mistake. A board with a completely outside perspective will bring you a refreshing new way to view your challenges and problem-solving, and get you out of your four walls to help you concentrate on working ON your business.

You’ll want to have high-level advisors who can advise you on all things business.  Every one of them should have an appetite for forward-looking opportunities and bring a strategic mindset to the tasks at hand. The BoA should have a good cross-section of expertise, such as talent retention and acquisition, strategic finance, sales and distribution, leadership coaching and operations/productivity, to name just a few of your BoA’s skill sets.

Starting the process, you’ll need to focus on 4 steps:

  1. Selection of Advisors

You want advisors who complement your own skill set, but also understand the need to keep the conversation strategic and “big-picture.” Look for advisors who are excited about your business and industry and see in it the potential and opportunities.

  1. Commitment and Compensation

Decide what the rate of compensation for your BoA hires should be. For a lower middle-market company, make an investment based on the frequency of meetings. An advisory board member may earn between $1,000 – $5000 per meeting.

  1. Discovery Process

At the first meeting, introduce your company to the board. Give them a good background summary of how you have built the company, where you are today and where you may want to be in the next three years.

  1. Deliverables

For the first meeting, draw up an agenda yourself.  After that, the chair should create an agenda with specific action items for each meeting. Discuss deliverables in each session, whether they were achieved or not, and if not, why not. Based on that information, make appropriate adjustments and identify additional resources and support if needed.

Advisory board work is a long-term solution for your business and your executive team. View it as a long-term strategy to help ensure the future health of your company. The benefits of such an investment are that you gain access to a group of thought leaders and business experts who will brainstorm, help you define a better solution and add to your thinking power. If they are effective, they will hold you accountable for finding solutions and applying them to your business.

Several times in my work with business owners and CEOs, I’ve heard them tell me they don’t want to pay for “thinking.” I always tell them that while they might consider themselves as being very strategic and smart risk takers, having another set of brains on hand might just get them “outside the box” in terms of ideas and problem solving that will help them advance beyond their competition.

Developing an advisory board to support the future of your company is one of the best investments you can make, as long as the goals and deliverables are clearly stated and you see yourself and your company making progress. Never under-estimate the power of outside the box thinking and advising. You have an opportunity to assemble an A-team to help you sort out your priorities and challenges, all for a relatively small investment of $30-$75,000 a year. The return on this investment is a factor of many, not excluding the fact that you are becoming a true leader for your business.

Want to know more?  Contact Rudi Scheiber-Kurtz for more details at 617-449-7728

 

Transform, Transition & Change

Transform ▲ Transition ▲ Change

by Rudi Scheiber-Kurtz

Words we are all very familiar with yet simultaneously love and hate!!  Everywhere you look you witness major shifts from status quo, whether it is politics, global warming or in fact our business models.

Mostly likely you will agree with me that the option to remain status quo is not a sustainable one.  One of my favorite words is A-G-I-L-I-T-Y because it hints at not standing still.

How are you going to transform, transition or change your business to provide your customers continuous value with optimal agility?

This January marks the 15th year of Next Stage Solutions offering strategic finance and operations to midmarket companies.  I am humbled at the hundreds of conversations with clients and prospects around sustainable growth, profit optimization and value creation.  I am proud to say that we have

The past 15 years have led me to a cross roads myself today, both professionally and personally.  I am in the middle of transforming. Transitioning and changing.  With that in mind I am working on the following:

  • Write a book/guide for CEOs on Value Creation. Each chapter provides hands-on tools and check lists for the busy CEO.  Looking to publish this spring
  • Transition NSS to an online digital platform for CEOs and CFOs to access finance and operational tools, proven methodologies, charts and guides
  • Develop a new online platform called Finance Beyond Numbers to establish a presence of forward-looking finance with a horizontal approach to leading
  • Lead XPX New England as the newly elected President of this 3 state chapter. It is an active and engaged group of professionals who help owners build valuable businesses and assist them in preparing and executing successful transitions.
  • Support my daughter Natasha with her brand new business that has the grand opening scheduled for January 16. It is a barre3 studio in Bedford, MA.  I have been taking her classes for over two years and I love the concept and work out. Words cannot describe how very proud I am of her for pulling this off single handedly.

Now that I have shared my five examples on transform, transition and change, what are yours? You may have heard me quote one of Yogi Berra sayings:  “If you don’t know where you are going, you’ll end up someplace else.”

I imagine that you do not want to be in that situation, we all want some kind of predictability.  More important than ever is for you to be WORKING ON the business, this way you have a chance to get to where you want to be.

Make it part of your culture to transform, transition and change and agility will be your friend.

 

 

Happy Thanks to Many Givings

My Favorite Thanksgiving Poem

Let Us Give Thanks by Max Coots

Let us give thanks for a bounty of people:

For children who are our second planting, and, though they grow like weeds and the wind too soon blows them away, may they forgive us our cultivation and fondly remember where their roots are.

Let us give thanks:

For generous friends…with hearts as big as hubbards and smiles as bright as their blossoms;

For feisty friends as tart as apples;

For continuous friends, who, like scallions and cucumbers, keep reminding us we had them;

For crotchety friends, as sour as rhubarb and as indestructible;

For handsome friends, who are as gorgeous as eggplants and as elegant as a row of corn — and the others — as plain as potatoes, and so good for you.

For funny friends, who are as silly as brussels sprouts and as amusing as Jerusalem artichokes, and serious friends as complex as cauliflowers and as intricate as onions.

For friends as unpretentious as cabbages, as subtle as summer squash, as persistent as parsley, as delightful as dill, as endless as zucchini, and who — like parsnips — can be counted on to see you through the long winter;

For old friends, nodding like sunflowers in the evening-time, and young friends coming on as fast as radishes; 

For loving friends, who wind around us like tendrils, and hold us despite our blights, wilts, and witherings;

And finally, for those friends now gone, like gardens past, that have been harvested — but who fed us in their times that we might have life thereafter;

For all these we give thanks.  Happy Thanksgiving to All!

thanksgiving