Businesses are all the same

Your omputer systems should do two things:  1) help you get the job done and 2) provide useful management information that underpins decisions. For instance, in a project tracking system, recording the status of each project and the date that it changed can create a simple traffic-light system that shows at a glance where things are going awry.

Extrapolating from the specific to the general:

  1. All businesses can be thought of as a series of flows and balances (or pipes and buckets if you prefer). Management information tracks the speed of these flows, the volume of flow and the level in the buckets.  Examples of flow volume are number of new enquiries per day, value of invoices issued per month or, in my client’s case, projects completed per week.  Examples of flow speed are average project duration, sales lead-time or quote turnaround time.  Examples of levels are debtors, or quote bank, or cash in the bank.
  2. Every part of your business can be thought of in this way.  When think of it in this way then you can identify the volume, speed and level measurements that tell you how it is performing.  You can spot leaks, blockages and levels that are too low or too high and fix them.  You can improve things.
  3. Efficient management focuses on exceptions.  Your management information at the top level should be designed to highlight exceptions.  If the reports you use are long and detailed, with the issues that require attention hidden amongst lots of other stuff, then the reports need fixing.  If the only way you can control a process (or your whole business) is by checking on every project or transaction then you need better management information.
  4. Once you have applied this approach to one process then you can apply it to all your processes.

If you’d like to know how to apply this approach to your business, and try out a system that helps you do this, visit https://www.thescaleupformula.com

Based on an original post on www.nickbettes.co.uk

Comments

Post a Comment

Popular posts from this blog

It's about the management, stupid

Image
To paraphrase the famous US election slogan "It's about the economy, stupid.", research (1,2) has yet again shown that the most important factor in business performance is the quality of management. Not how much the company spends on technology. Not how much digital marketing they do. Not even how much is spent on R&D. Just how well the business is managed. Really simple, doable stuff.  A clear purpose.  A usable orgchart.  Useful job descriptions.  Repeatable written processes.  Measurement and regular review. None of these are difficult to do, although implementation does take time, determinationa and resilience on the part of the owner and there are some basic techniques to learn. If you would like to learn how to apply better management techniques to your business then take a look at this website . 1) What Drives Differences in Management Practices? Nicholas A. BloomErik BrynjolfssonLucia FosterRon JarminMegha PatnaikItay Saporta-EkstenJohn Van Reenen, A...
Read more

Scaling - gotta love the numbers

Image
There are two critical elements to running a scalable business:  People and Numbers. We know that a scalable business is one where the owner focuses on developing the capability, capacity and accountability of employees.  But you need numbers to do that. If you want to delegate properly you must delegate the responsibility for a business result - not a task.  To do this, you need a clear, agreed definition of success and this is almost always a number. If you want to develop employees you must develop their business understanding, commercial awareness and ability to plan.  All of these things require conversations and coaching based around numbers; what they should be, what they actually are and what needs to change to close the gap or improve. If you want employees to consistently succeed by achieving their number then what is delegated must be a repeatable, teachable, measurable process. Some business owners think applying numbers to managing employees will be ...
Read more

Do you even measure productivity?

Image
Is low productivity built-in to UK small businesses? One benefit claimed for Brexit was forcing UK business to address its woeful productivity.  Particularly in the SME sector our productivity is far worse than that of our competitors and there is a school of thought that says ready access to cheap labour contributed to this (although opinions vary of course – these are economists. In particular, countries such as France and Germany have had the same access to labour without it depressing their productivity in the same way). Be that as it may, many UK businesses have faced labour shortages and wage increases.  The news bulletins run interviews with under-pressure business owners, most of them saying: I cannot get the staff so I am limiting capacity and turnover I have had to raise wages to get or keep people and I can’t pass that on in prices I am paying higher wages but that doesn’t translate into more productivity The gist of these opinions (from albeit a tiny and edited sam...
Read more