Back to School means Back to Business too?

Yes, it's time to get back to business.

End of August means summer holidays are nearly done, kids returning to school, and it's time to re-think your business too.  

Seize this opportunity to assess your current performance and come up with an action plan to improve results and enhance the value of your business.

Here are some ideas to inspire you to get back to business and do better than ever.

Check your numbers against the top performers.

You probably already know the key variables to manage profitability in your business - gross margin, sales per square foot, or sales per employee, for example – but have you compared your numbers to the top performers in your industry lately?

How has the current economy affected their growth rates or performance ratios compared to yours? You will have to do some homework to get the answers. Be sure to find the most comparable companies by industry size or type of business and then try to select the top performers. You may get useful comparisons from available data on public companies, from trade journals or from industry data bases. Your banker likely has access to RMA (Risk Management Association) data that is used by the banks to assess your credit worthiness. It is worth knowing what they are looking at and how they assess your performance.

Ask for key stakeholder opinions on your performance.

In addition to the bank’s assessment you should also regularly solicit feedback from your other key stakeholders. Those would be your employees, your customers and your suppliers.

The key questions to ask are:

• How would you describe our company relative to our competitors?

• What do you think we do best?

• Where do you think we need to improve?

• What opportunities do you think we are missing?

Listen and learn from the feedback.

Often business owners are surprised to find that the perceptions of their employees, customers and suppliers are quite consistent, but very different from their own.

You may think your business is best known for low prices and fast service, but others see you as having expertise that is valuable and worth paying the perceived higher price and accepting relatively poor service. Oops!

Now you have something to work on. First, try to ensure that your perceived strategic position in the market is the one that you want; then work on delivering what is expected. And finally, assess the feedback on perceived opportunities that you are missing. You have already established a receptive audience to new initiatives, so follow-up quickly.

Verify your corporate fitness for growth

In order to pursue new opportunities and grow your business it is also timely to verify that you have a solid foundation for growth. The foundation needs to be resilient, flexible, and expandable in all the dimensions related to organisation, facilities, financing, and IT infrastructure.

A fitness test on all these areas is a necessary first step before launching new initiatives.

Focus on maximizing long-term value.

In these processes of performance review there will be some obvious and easy “quick fixes” to generate revenue or cut costs. But as Einstein apparently once said, “For every serious and complex problem, there is an easy and obvious answer, that is wrong.”

For businesses the error is usually to focus on short-term profitability, rather than long-term value. In fact, the accumulation of short-term decisions to control costs or push revenue may actually diminish the long-term value that arises from sustainable and profitable growth. Typical examples are under-qualified staffing, limited capacity software applications, cutbacks in marketing and promotion, chasing big customers with low prices or accepting questionable credit risks.

Identify and select the priority opportunities.

After completing the review and assessing the opportunities, the list of potential action items may be long. A selection of priorities to address in the immediate future is required. And more than three priorities means you have not yet made a selection, only a ranking. Try harder.

Make a new plan.

With a short list of priorities, you can make a realistic and achievable plan to improve performance. Simply list the steps required with names and dates assigned to each step.

Then make it happen.

Take this “back to school” opportunity to rethink your business and make something happen. Remember if nothing changes, nothing happens.

Be better. Do better.

LISTEN TO MOM

As my mother once said "Don't do anything you wouldn't do if I was there." Ouch! Now that was a great way to keep me on the straight and narrow, instead of looking for trouble as a teenager.

I've often thought about that advice since then and generously offer it by thought and gesture to others. Especially those dangerous drivers flying by on the highway - "Does your mother know you drive like an idiot!?"

Mothers are an important influence to guide our ethical conduct in business too. That was apparently understand by the jeweler in Cranbrook BC who had a conspicuous sign posted next to the cash register stating "We give instant credit to all our customers. If they are over 90 and accompanied by their mother." Good credit guideline!

Most entrepreneurs and executives probably don't often think of their mothers on the job, unless she's the boss – like Ma Boyle at Columbia Sportswear. Maybe they should. We would probably have fewer issues of corporate misconduct if their mothers knew what was going on. Perhaps instead of all those current management courses on ethics and corporate responsibility, we only need to remind decision-makers to ask themselves "Would my mother be proud of me if she knew what I was doing?"

My Uncle Ralph persona is partly inspired by my father and his unique character and style of dispensing wise advice, punctuated with easily remembered one-liners (“Always do good work and charge like Hell!”).

But my mother also had a strong influence on my personality and management style, although it was more subtle and less frequently stated than demonstrated. Quiet, hard working, good humoured, responsible and respectful of others; those are the characteristics that immediately come to mind. Things we all learned from her example, simply by being around her. Of course, she was also good at reminding us when we forgot those important principles or our behaviour was not up to her standards. And it's still a pleasure to make her proud.

That's why I recommend you use the test "What would Mom think?" before your actions and decisions in business too.

Thanks Mom. And Happy Mother's Day every day.

On the other hand, “I am not your mother.”

Now I am suggesting that we might have better decision-making if managers asked themselves what their mother would think of their actions. But what about those employees that expect you to act like their mother?

What is the right level of caring and compassion before it becomes more personal than a working relationship should be? Is there a reasonable limit? Is it appropriate to get involved with issues that are strictly personal? Do employees become part of your extended family with all the additional obligations that implies?

Some recent exposure to business owners dealing with their employees' personal issues has caused me to be more cautious about getting involved. Once the managers start lending a sympathetic ear and then a shoulder to cry on, it soon becomes more time consuming on and off the job and creates a relationship that is difficult to steer back to business only. It also becomes a distraction for other employees and creates new concerns about employee favouritism.

My guideline for these situations would be to decide whether you would do what's being requested for every employee in the same situation. Personal advice? Time off? Cash advances? If not, then say no to the first request. Don't start a precedent that you're not prepared to write into the policy manual.

And don't be afraid to clarify the relationship, "I'm your boss, not your mother".

Those are my thoughts on Mom's influence on your business.  Do you agree?  Any comments?