This week we continue our focus on the post pandemic re-opening of business. Other than dealing with customer and employee fears, there is nothing different or special about today's show except urgency. Unlike other expansions at the end of a contraction, this was not a structural - it was imposed. Normally a contraction (recession) is a result of over supply and decreasing demand awaiting a unplanned event to prick the bubble. In this case the demand still exists with diminished supply and we have sufficient information to predict the beginning of an expansion. The purpose of IBGR programming this month is to prepare the entrepreneur for the turnaround. it will require acting with urgency over the next 4 months.
The goal for today's show is to move from knowing to doing. In previous episodes (listed below) we covered a Measurement Skeleton that is an excellent starting point. We have used this template in our businesses as well as with clients either as a place to start or the basis for developing unique measures.
It is based on the Balanced Scorecard technology and has been modified to fit the demands of small business; startups through growth and exit. I will overview the past shows so you can begin building your own.
What You Need to Know
Quick review of Balanced Scorecard
It is based on the reality of business - Financial Performance is not a cause but an effect of other parts of the company. Our sequence is to start with Customers (current and future) and determine what are the critical metrics. It appears we are working backwards however by starting with metrics it is easier to identify what needs to happen.
Once we know what customers wants and how to measure, next it has to be Made and Delivered. If we are successful at providing what the customer wants, what are the internal processes required to deliver it?
Last but not of lesser importance are People (Talent). The reason it is last in the process - it is easier to attract, hire, develop, and compensate when we know what People are supposed to do. Think of this way - compare 2 competing companies. One has great people with no infrastructure and the other has great processes with average people. Long term - which will win the competition?
The last issue of importance is creating Dashboards for people in the firm so they know what is important and how well they are performing. This information is rolled up the organization to management and the owner into Scorecards to track real-time performance of the business. This is when you create Financial Performance.
C + P + T = F
The Following are the key topics covered in previous shows:
What You Need to Do
Next Show: E.021 Operational Measures
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