Member Insights by SSE Advisors, LLC
With a little over 4 months remaining in the year and the planning season here, the time to ask “is your business past due for a check-up” is now.
With most things in our lives, we perform some type of diagnostic to ensure they are operating properly. We inspect our homes each season. We take our cars in for vehicle maintenance every 3,000 – 5,000 miles. We visit our doctors for physicals at least once a year. We do these things to ensure that we catch issues before they become major problems. Are we doing the same for our businesses?
Yes, as part of the yearly planning process, we conduct some type of evaluation of the business to see where we are, however, we are usually focused on answering the question of how do we get to where we are trying to go? This may provide a perspective on what to do moving forward, but does it really provide a true diagnosis of what’s happening within the business today. It’s time to ensure that a true business diagnostic is not lost in the planning exercises.
So, what is a good diagnostic? A good diagnostic not only checks the current status, but also identifies any potential problems that may be on the horizon. Here are a few aspects of the business to examine as part of the organization’s diagnostic:
- How well is the business performing against desired metrics and progress identified in the strategy and plan? More importantly, ensure that you are measuring the right things and understanding what’s driving success vs hindering progress.
- Is the business generating sustainable profitability? This helps understand the drivers behind revenue and expenses and the ability to generate cash flow.
- How effective is the executive team? Executives should help achieve success by encouraging innovation as well as inspiring, empowering and recognizing employees.
- Is the value created being delivered to customers? This requires truly understanding the value promised versus customers’ perceptions.
- How effective are your Marketing and Sales activities? These are two different functions driving toward a similar outcome, not knowing the difference could threaten the ability to build the business.
- Do you have the best talent, positioned to optimize success? Organizations need to have great hiring practices, development opportunities, retention programs as well as consistent firing policies.
- How effective are your communications? Effective communications address both internal and external communications, as they both play critical roles in the business.
- Are your services and operations helping or hindering your success? These functions should help extend the value experienced by your customers.
- Does your culture allow for your strategy to flourish? In the face of change and innovation, your culture will determine the organization’s ability to be successful.
Understanding the above components allows an organization to position itself for sustainable success. Remember, a great diagnostic is not just a snapshot of where the business is; it is also an opportunity to truly get ahead of potential challenges to come.
Anthony McIntosh is President and Founder of SSE Advisors, LLC, a strategic business advisory and consulting firm, focused on developing strategies and plans that help clients build sustainable success. You can contact Anthony at either email@example.com(email) or 847-668-1909 (mobile).