6 Steps to Business Clarity
At Freeman Clarke, we use the term “vision” a lot. But we don’t only mean imagining what’s down the road for your business. We also mean asking yourself if your reports and management information allow you to see your company clearly right now.
You can grow in the short term by reacting to opportunities as they arise. But to grow a business sustainably you need to clearly see your activities and the outcomes, your customers and the wider market.
Clear vision of this information requires a platform of systems and processes that are not easy to implement. The good news is that we’ve done it many times. Based on our experience, we have created this simple list of the six steps for CEOs to achieve clarity.
- Clarify who’s in charge. Create a strategy and architecture for where master information is held and how it is shared between systems and people. Which system is the master? Which teams are responsible for creating and maintaining the data?
Automate links between systems where possible to avoid manual effort which is expensive and (inevitably) prone to errors.
- Set the rules. Set standards for data management and maintenance. Decide who is responsible for ensuring data is correct and for training and policing those standards. Monitor how often these rules are broken and whether specific teams or people are repeat offenders.
- Be efficient about reports. Finalizing reports for specific individuals can be endlessly time-consuming. Instead focus on the broad areas of information that managers or directors need. Ensure you have flexible tools and reporting skills so you can build and change reports easily.
Review your reports regularly and ask yourself which reports are valuable and which are not. Stop producing those that are no longer useful. Or change formats where “report fatigue” has set in and useful information is being missed.
Again, automate wherever possible. Manually generated reports are a great waste of time and money.
- Take a hard look at what you’re reporting. Often reporting is focussed on old-fashioned financial indicators. Identify the more relevant indicators, especially the non-financial ones, which will allow you to strategize and manage events as they unfold.
For example, as well as monitoring sales last month, monitor web activity or numbers of inquiries, which may be indicators of future opportunities. Monitor unusual changes in stock levels or supplier lead times, especially of critical items, to avoid future issues with fulfilment.
- Analyze profitability by product, client, and service line. Ask yourself, What are the real drivers of cost? Where do you have influence over cost?
Use this information to drive cost-reduction projects to provide an extra few points of profitability. Using it to inform the sales and marketing strategy can be transformational to the overall success of the business.
- Free your executives from operational distractions. Where in your business is “expert judgement” important? How can you generate data that would allow you to use machine learning? Perhaps to improve decision-making, or to reduce manual effort, or to allow you to scale your business and to free up directors to spend their time elsewhere?