“More companies die from indigestion than starvation.” – Dave Packard, Hewlett Packard
You might be surprised to know that I speak to business owners every month who want to grow 25% next year, but they don’t have a plan to get the sales or handle the extra work.
According to Scaling Up by Verne Harnish, these are 3 warning signs that you aren’t ready for more sales:
Your profits are at or below the industry average [or you don’t know what that is]
Processes are not running smoothly now
There is drama on the team or from customers from missed deadlines, increasing mistakes, lack of resources, and “communication” issues
People are working overtime to fix problems
At the very time when the focus becomes more important, your key people start being “too busy” putting out fires to work “on” the business.
Maybe you are doing this too— getting dragged into daily work instead of setting aside time to evaluate, plan and work on the key projects that will improve the business.
What is the solution?
Thousands of businesses have adopted the “10 Rockefeller Habits” as outlined in Vernes’ book “Mastering the Rockefeller Habits” (and now updated in his recent book, Scaling Up.)
If you want to “grow” your business 20% or more in the next year… what is your plan to make it happen?
Do you have an achievable sales plan? Great!
Now:
What about a People Plan to handle the additional work and keep your customers happy?
Are you planning any changes to your process or technology to be more efficient?
Do you have a plan to handle the increased cash needs that always come with growth?
Most companies focus on the sales side of growth and just let the People and Operations side just figure itself out… this approach causes the “growing pains.”
You might be surprised to know that I speak to business owners every month who want to grow 20% next year, but they don’t have a plan to get the sales and/or handle the extra work.
“More companies die from indigestion than starvation.” – Dave Packard, Hewlett Packard
According to the book “Scaling Up” by Verne Harnish, these are 4 warning signs that you aren’t ready for more sales:
Your profits are at or below the industry average [or you don’t know what that is]
Processes are not running smoothly now
There is drama on the team or from customers from missed deadlines, increasing mistakes, lack of resources, and “communication” issues
People are working overtime to fix problems
At the very time when the focus becomes more important, your key people start being “too busy” putting out fires to work “on” the business.
Maybe you are doing this too…
Getting dragged into daily work instead of setting aside time to evaluate, plan and work on the key projects that will improve the business.
A few real-life examples:
I spoke with three business owners this week who are living this right now.
One almost doubled the revenue but the profits plummeted.
another doesn’t have the hourly staff in place to handle several new clients so she is filling in and training $12 an hour staff.
A third added more customers but one technician team “burned out” and quit… now he is back in the field and everyone is working 50+ hours handling the overload, and revenues are down 20% and profits are zero. Ouch!
What is the solution?
Build the 4 Foundations to Scale Up– Strategy 6 People + Execution + Cash– all TOGETHER.
Changes to one of these four impacts the other 3– so you need to look at the “whole picture” of your business.
[from “Scaling Up” by Verne Harnish- graphic from book summary by Readingraphics]
Here are my thoughts on “Why Aren’t You Finishing Projects – Part 2”:
The main answer is that you are juggling TOO MANY projects.
Below is my graphic explaining another concept from Todd Herman.
This example shows what happens if you juggle 5 projects, versus tackling one at a time:
This shows you the impact of “context switching”– when your brain and effort is spread across multiple things.
As Todd explains it, if it takes 4 hours to finish one project, and you do one hour a week on 5 project at a time, it takes you 16 weeks to finish Project A.
If you work on only Project A, you are finished in 4 weeks.
Now I realize that some projects take more time and require waiting on other people, but I think the concept is pretty clear.
One finished and implemented project is worth 50 started and abandoned ones.
If you need a bit of inspiration/ motivation to keep plugging on Project A, re-read the article PART 1.
So pick one half-finished project and make a commitment to power through and “get ‘r’ done” by the end of the 13-week quarter.
You, small business manager, want to improve things.
I will bet dollars to Freddy’s Famous Buffalo donuts that you have a “wish list” of projects you want to implement, and you have started some of them.
Yet your office (and mine) is littered with books unread, binders from great workshops, possibly brochures or saved emails with a system or process that sounds great. One you want to investigate that just might make your business operate more smoothly or more profitably.
Hey, we are idea people and we are starters (maybe not finishers).
When you do start something new with anticipation, this most likely happens (image from Todd Herman):
One of the most persistent complaints I hear from employees of small business is that “we don’t finish what we start” and that the owners/ managers are always adopting the latest book advice or stuck in chasing shiny objects syndrome.
Making changes, finishing a project or new process, and getting everyone on board and sticking with it is HARD.
You have to be patient and persistent to make progress, and to stay positive with all the set backs and challenges you encounter.
Four things you can do to start and finish your projects:
Do ONLY ONE at time (more about this next week)
Enlist the help of your team– don’t do it all yourself
Create an action plan with weekly action items and assign tasks to specific people with a deadline
Meet weekly (same time) to review what is complete, what needs to be discussed/ decided, and what is next
As a bonus– get an “Accountability Buddy” outside of your team/ company (a colleague or a consultant) who will hold you accountable to make progress, keep you motivated, and help you work through the inevitable bumps on the road.
Maybe even decide the reward you will give the team to celebrate– such as a “pizza party” or outing or something nice for the office (plants? Fooze ball table?). This can keep you motivated as you slog through the tough parts and keep you sprinting toward the finish line.
How do you know when to fill up the gas tank on your car?
Or when you are speeding above the speed limit? Or your engine is overheating? Or your tire pressure is too low?
Because … every car has a dashboard — a handy visual guide to the key things that matter to operate your vehicle properly. (Geeky history: They have been around since the early days of autos – the speedometer was invented in 1902 and installed in cars since about 1910. My great aunt Louise proudly told tales of driving her dad’s roadster over 100 miles per hour on country roads in the 1920’s.)
So if your $35,000 auto has a dashboard, do you have one for your multi-million dollar business?
You can see the advantages of this concept– if you are focused solely on current sales or cash in the bank, there are other other areas of your business that need tending for future success. If you don’t have leads or are losing work to your competitors, or your service delivery level or employee engagement is dropping, these are warning signs that predict lower revenue and profits.
8 Benefits of Dashboards
1. Visibility: The new field of “Business Intelligence” or BI shows that the more you measure in your business the more you can improve. What is measured becomes higher priority and gives you the tangible target to improve.
2. Maintain quality during growth: If your business is growing, you need to make sure that you are maintaining the quality and customer experience standards and your team is not burning out.
3. Alerts before systems break: When you track leading indicators, you can see issues coming before they happen. For example, if you track pending orders you might see that your current production schedule can’t handle the order volume and will be backlogged by two weeks. Dashboards can alert you to this before chaos ensues.
4. Less stress: When you have a dashboard, you can get timely and accurate data on your business health, compared to your targeted goals and to historical trends. This will allow owners and general managers to feel more comfortable letting go of responsibilities, while knowing they are “watching the store” and things are running smoothly.
5. Basis for accountability: How do you know your managers are doing their job? Easy, just check their department dashboards. Where do they need more coaching? — you will see a lack of improvement or a drop in their key numbers to let you know there is an area to discuss and determine the root cause. This ongoing process improvement conversation increases the business knowledge and the decision making competencies of your managers.
6. Data to make / evaluate decisions: Did that marketing campaign or new training program yield positive business results? If you see improvement in your dashboard numbers, you can see if a project was successful.
7. Creates ownership thinking and alignment: This is especially true when business dashboard metrics “cascade” down to departments and to individuals. Employees and managers start to understand what they can do to increase revenue and customer service and efficiency or reduce costs.
8. Improves revenue, productivity, margins, profits and teamwork. As you can see from the list above, focus and clarity around what is important to drive business value and improve your value to customers will only improve your financial results and operational capacity.
As you can see from this list, implementing dashboards and management review and planning around the data can be the foundation of high functioning, profitable and growing organization.
Next article I will share details on Step 5 “Delegate, Don’t Abdicate” [see all 6]
I often spend time with clients and other business owners who are full of ideas– so many they don’t know where to start, or they starting working on 2 (or 10) without much progress. Their head and office notebooks are littered with the ghosts of projects past.
I heard another business owner Amy call this being an “idea hamster”– what a great term!
You have an idea, and another idea, and another one, and you start running on that hamster wheel spinning and going no where.
Sound familiar? I know that it does for me, I struggle every day with being a reformed hamster.
Here are six key steps that have made a difference for me to complete something important [as Seth Godin calls it “shipping”]:
Write a destination postcard for the end of the year– what you plan to accomplish
From the postcard results, generate a long list of potential projects and categorize by type [are they planning, sales, marketing, people, operational?]
Now rate those projects on effort and on impact on your goals — then rank by those with the highest impact and the lowest effort — these are your short list– put the rest into a “parking lot” [crucial step 1- they are always there to be re-considered.]
Prioritize the list of projects— does one have to be completed for another to be effective? Does one address a burning issue or roadblock to growth? Rank them and put a guestimate on the number of weeks to complete.
Select the Number One priority project, get your team together, make an action plan to divide up the tasks and start chipping away every week.
Crucial step 2– do not start another project until this one is complete!
Do not get distracted by the next shiny thing, just keep momentum on that project. Focus on the next step, one at a time, every week.
Get your team concentrating on just one task and making progress. Yup, it’s hard to do but any change in habit is challenging.
{See the great graphic above that I think captures what we all go through! This is great, this is hard, this sucks… dark swamp of dispair…}
