One of the best ways your company can begin a successful growth and improvement initiative is to take an objective look at your organization — scrutinizing every detail, imperfection and flaw.
What’s the point? Self-examination and self-reflection allows you to spot the truths and attend to the gaps in performance. Only you have the strength, vision and backbone to shore up your company’s weaknesses vs. the competition — and since this is your creation — only you can spot the underperformance when compared to your original dream of the company.
ACTION IS CRITICAL
It’s safe to assume the majority of fabricators did not experience their best-ever sales or profit year in 2009. It’s also reasonable to assume many firms need a healthy kick-start in 2010. Can you accomplish the necessary strategic planning in time for the New Year? If you do not have time to create a comprehensive strategic business plan from scratch, consider this alternative route to the next best thing: a working Action Plan.
What follows is a 26-point, A to Z template maker — an ideal Watch List for a progressive 21st century organization keyed in to what matters most in the new business age.
This Watch List was developed from years of observing which topics have the most torque in a company — as well as which topics seem ready to explode. Review each basic topic (some are bundled together) and evaluate how you believe you did in 2009 vs. a hypothetical world-class effort.
Warning: This only works if you grade yourself with merciless honesty. You must get tough. No person or system can escape scrutiny. When performing your self-exam, make plenty of notes and get plenty of expert opinions from the front lines. Call customers, vendors and others who interface with your company. Judge evenly, judge fairly.
Bonus: If you’re fair and accurate (using a simple A through F academic grading where A = 4, B = 3, C+ = 2.5, etc.) you’ll even be able to tabulate your Business Grade Point Average (GPA).
While each topic and the grade you assign it might be argued, the number of factors involved in attaining a final total score will mathematically restrain highs and lows, producing a defensible benchmark that can be annually measured and compared.
READY. AIM. AIM AGAIN … GRADE 2009’S PERFORMANCE
Management’s attitude: Were you prepared to have a successful year or were you fully expecting a bad year based on negative economic forecasts? For 2010, act as if you are in charge of your own economy and destiny.
Morale and level of engagement demonstrated by your staff: Were they routinely given the big picture of the company mission to help establish individual and team goals? Were they given motivation and incentives to perform at peak levels?
Leadership and magnetism: Did managers regularly display these critically important forms of guidance, mentoring and influence? Did the staff show evidence of dedication that would prove personal magnetism could inspire a “follow-you-anywhere” movement?
Customer base: Do you have a system to track customers by type? Did you reduce the turnover/churn experienced with customers and investigate customer drop-outs? Why do you lose customer volume? Have you transformed inactive customers into huge surface-buying monsters? Next year’s Action Plan should include both customer retention and win-back programs.
Quality and accuracy: Does every shop produce flawless tops? Impossible, right? It’s the four out of five dentists recommend syndrome — somebody is that fifth dentist. Are quality checks embedded in the fabrication process? Is there a locked system for honest feedback? Measuring and posting your everyday quality and satisfaction rates is a must.
Productivity and lead-time: Gains here produce drastic improvements for the company and its workers. While boosts in productivity made the difference during recent economic expansions, gains also introduced the “jobless recovery scenario” which plagues us even today. Are you doing more with less? Your 2010 goal is a critical benchmark for success — strive for efficiency, not just downsizing.
Cash flow and accounts receivable: When collections slide and expenses rise, your checkbook reminds you by screaming “Feed Me!” Do some research — what are your trends? Are your processes slipping as much as your customer’s ability to pay? Do you run short even when sales are brisk? Track your DSO and set impossibly high goals for next year.
Accounts payable and maintaining terms: Are you somebody else’s notoriously slow payer? Do you avoid phone calls; endangering your standing with industry players? Do you just quietly pay the late fees? Develop a credit repair plan that actively features you meeting personally with your biggest suppliers.
Credit: Don’t confuse “credit” with “debt.” Successful businesses need credit as much as any other resource. Did you make money or create opportunities with your credit? What grade do you deserve for continuously shopping the very best credit deal? If you’ve slipped, make an iron-clad promise now to leap forward in 2010.
Equipment: I would be preaching to the choir if I went on at length, so I’ll just pose two questions. You know what equipment you need but are you certain how best to obtain it? Are you equally comfortable with your computing/technical needs for your organization’s digital future?
Asset management: This may get little attention, but when done right it can plug the profit leaks in your business boat. With active management, you can squeeze every nickel out of your facility, trucks, bank accounts, A/R, credit and leasing terms and your employee group. Do you have many flattened nickels?
Talent: Is your employee group tops in the area? Is your hiring and development process actually a process? You are judged by their performance and behavior. Do you feel proud and secure?
Offerings and product mix: What do you sell and why do you sell it? Do you have the right stable of products for the markets you wish to serve? If you can’t reasonably defend every surface and service, drop the distraction.