All business owners work hard.
However, if you’re working harder than ever, and experiencing more stress than ever, but seeing your bottom line results barely change, it’s time to refresh performance management in your business.
That’s particularly true if you’re also seeing:
- too many customer complaints, often for things where you ask yourself “how on earth did that happen?”
- your best people keep getting jobs somewhere else, often at one of your competitors
- occasional cash flow pressures become all-too-regular cash flow pressures
- your investments in new equipment and new people are not paying back as quickly, or as well, as you think they should
- your business has too many internal meetings
- getting simple administrative tasks done is like wading through treacle – not for you, probably, because you’re the boss so people look after you as a priority, but for people on the frontline of your business…the ones who look after your customers
- month-on-month, costs are rising faster than sales
- or anything else that’s getting you increasingly frustrated with the results you’re getting from your business.
You see, performance management sounds like a vague subject, but it’s not hard to spot a business which isn’t performing.
If you’re a customer, and things regularly happen late, or wrong, or break after a few days, it doesn’t take you long to work out that business isn’t performing well.
It’s the same when you’re the boss. Even if you don’t know for sure exactly what’s gone off the rails, you get a feeling for when your business isn’t performing as it should. That means it’s time to refresh your performance management systems.
What is performance management?
Some people use “performance management” to mean the sort of issues the HR Department look after, but that’s far-too-narrow a view of performance in your business.
Performance management is really the art and the science of getting your business objectives delivered as quickly and efficiently as possible, to the highest possible standard. If you do that, you should have no difficulty building a highly-successful business which generates industry-leading profits and cash flow with less stress for you, and better results for your customers.
So, while it includes the people management piece HR talk about, Performance Management really includes the whole system which drives results in your business – the people, the investment in equipment and technology, the supply chain, the sales team, the marketing, the logistics, and much more.
If you want industry-leading results, you have to work on all those things simultaneously, and systematically.
Does performance management make a difference?
I’ve led a number of award-winning businesses by prioritising performance management that delivered vastly better results fast, including:
- being recognised as one of the Top 100 Places to Work
- making our workforce 2.58x more productive on the way to increasing revenues 3x, meaning we grew three times bigger while barely increasing our production costs
- grow sales revenues 2x-3x in three years or less, across three different sectors
- reached the national finals of the Management Today Service Excellence Awards
- reduced unit production costs by 56%
And here’s something that might surprise you.
In none of the dozen or so organisations I’ve worked for as a senior executive have I had the technical expertise to make the products or provide the services those businesses sold. The transformation came from infusing the technical skills each business already had with my expertise in performance management.
Plenty of businesses have people with good technical skills. I rarely come across a business without the technical skills it needs to succeed.
But if the performance management system and culture isn’t right, the business’s theoretical capability to succeed ends up being frittered away. That’s how businesses which do great technical work end up perishing in a competitive commercial world.
What good performance management looks like
Most business owners get intensely frustrated when things go off the rails, or don’t happen as quickly, or as well, as you think they should.
To put those frustrations behind you for good, you need a systematic process where:
- there’s complete honesty and transparency among your management team about where the business, and their department, is today – a remarkable number of problems can be traced back to a department which isn’t performing well, but whose manager is highly skilled at pointing the finger at others.
- there’s cost and activity tracking for all the things that really matter in your business. Please note, that’s not the same as “tracking all the things that happen in your business”. Bureaucracy can stifle an otherwise successful business, reduce efficiency, and cause knock-on problems nobody anticipated. Tracking what matters, and only what matters, is key.
- your business is run as an integrated system, with inputs, processes, and outputs, not as a series of semi-independent fiefdoms and departments who do things their own way, irrespective of the impact on the rest of the business.
- you work with your customers and your people to get under the skin of what’s causing them problems and fix those in a systematic way.
- institute a continuous improvement programme to make sure you stay several steps ahead of your competition.
Follow this approach rigorously for a while and you’ll transform your business.
The importance of being systematic
None of this is probably news to you. You’ve probably been nodding along as you read down the page. Yet, at the same time, you know that your business could perform better.
You might even suspect where the problem might be. And, to an extent, you’re probably right.
But the situations that came to mind when you read the bullet points above tend to be surface-level issue, rather than the root cause, which is why you need to be systematic.
If you think Department A has an issue, it’s probably got a knock-on impact on Department B that hasn’t got onto your radar screen yet, otherwise you’d think you had a problem there too.
And, remarkably often, “the problem in Department A” turns out to be the result of something Department C did or didn’t do in the first place.
In my 25+ years as a CFO, CEO, Chairman and Non-Executive Director, I often see people addressing surface-level issues, usually with chewing gum and sticking plasters, before moving onto the next one without ever addressing the root cause of whatever was throwing the business off-course in the first place.
There’s usually lots of activity, no shortage of meetings, and plenty of PowerPoint slides about all the things that are being “fixed”. There’s a rush to claim credit for the upcoming “improvements”.
And yet a few months later, you find you’ve got much the same problem to deal with again.
The only lasting solution is to approach your entire organisation systematically. That way, you can be confident that everything which can be put right for good, has been.
Make a start here
If you believe your business could benefit from a systematic approach to performance management, we should talk.
Currently, I offer a free, 1:1 strategy session called Perform Like a Champ where we take a look under the hood of your business, identify your opportunities to make positive changes fast, and set out a plan for the next 90 days where you can identify – and solve for good – the root cause of whatever issues are causing you unnecessary stress and frustration right now.
And into the bargain, solving those issues means your business will make more money on the bottom line with less time and effort on your part.
There are big benefits from getting the performance management recipe right in your business. Financial benefits, operational benefits, and personal benefits.
Get in touch today and we’ll schedule your free, 1:1 Perform Like A Champ session where we’ll spend an hour together identifying where the biggest opportunities for improvement are hiding inside your business right now.
Just click the Get in touch button below and we’ll get your free 60-minute session organised.
Business cost reduction and profit improvement specialist.
Experienced CFO, CEO, and Chairman.