The Power Of Measurement & Control
Today what I’d like to sort of get you to sort of think about is measurement and control.
Today, I’m off to see a client and we’re doing a board meeting and the board meeting for this particular company initially when I got involved with them last year, was a bit loose and they really didn’t do board meetings before and that’s absolutely fine.
I think what struck me first about the company when we did its first board meeting, was the known, as part of the entrepreneur’s success with their non-executive director, we were looking at it closely and were all excited for it.
We got a lot of time in board meeting presentations.
Realising the Amount of Control You Need in Your Business
Fancy covers and folders and all laid out neatly on the table and, commitment because they took it seriously.
A big shout out for that.
However, the contents on it was pretty poor when we got down.
I remember having a discussion with the managing director or CEO afterwards, and that discussion went something like this:
So, how did you find it?
He said, Mike I found it very, very tough.
I think you were exceptionally hard on myself and my team.
I said, okay, talk to me, why?
He said, well, we put a lot of effort into getting the board papers right, we put a lot of effort into this and, you just didn’t seem to be too happy with anything.
So, we always take feedback seriously.
So, I took this point to break this down for them and say, well, okay, so take out the fancy covers and the neat presentation in the effort.
That’s commendable, it shows you’re serious about that.
So, that’s done and you deserve a big pat on the back for that.
However, that’s not really talking about the real details, the banks or your venture capitalists, if they had any, would be interested in.
That’s you being in control of your numbers, your finances, being in control, of your KPI’s, your key performance indicators, the key numbers, the key metrics that run your business.
The simple matter is, it wasn’t.
We always start the board meeting with finance.
The reason why we started the board meetings with finance is that that depends who’s getting a pat on the back or who’s getting the shoeing as I call it.
So, as an example, if the sales numbers are down then you can imagine the sales director is going to be in for a bit of a tough time.
If the cost base is up, that’s in the operations director or the finance director who’s in for a bit of a shoeings.
Now, we don’t do board meetings just to give people shoeings, but that’s equally if those metrics are in check then they’re going to be getting good pats on the back and strong progress merits and rewards for that.
So back to this board meeting.
The numbers, they were loose at best, they weren’t completed, and my simple point was if you spend more time getting your numbers accurate and up to date than preparing fancy covers and neat layouts.
It’d have been a more meaningful board meeting.
Not being able to see the numbers in business.
By numbers I’m talking about the latest situation on your profit and loss, balance sheet, cash flow, creditors, debtors, financing numbers, all that type of stuff, we could have had that meaningful discussion.
We couldn’t have a meaningful discussion because the numbers weren’t there.
The pinout wasn’t up to date, the cutoff date for the finance calls down were missing, creditors weren’t up to date, debtors weren’t up to date.
Ultimately the balance sheets were wrong, so, we sat there as a board trying to make informed decisions, without a compass.
So here’s what you might want to run down.
It’s not new to us, it’s a well-known saying, but it’s worth reminding yourself of that is, if you can’t measure something, you can’t control it.
If you can’t have accurate numbers, you can’t make informed decisions.
If you haven’t got informed decisions from accurate numbers.
You can’t measure anything, then your business is out of control.
You’re going to be spiralling and spiralling out of control, making decisions based on a strong sales performance.
But if you don’t know what the profitability of those sales contracts are, then you could be in seriously deep water very quickly.
A couple of other things as well as, whilst the managing director or CEO was up to speed on the board reports.
Ultimately, with respect to the finance director wasn’t confident about the numbers as we said earlier, and there was a big, gaping holes there.
The Stages after Sales
The sales director was talking sales to us.
So, if you’re a sales or commercial director out there who go into board meetings talking about the opportunities and the sales and things like that.
Well, I think you need to get unpegged and shot down pretty quickly because what I’m interested in as a non exec, or a chairman of the board, is, okay, give me a sales pipeline.
Show me the date that that came in, show me what your sales stages are, so is it in new inquiry stage, is it qualified stage, is it appointed stage, is it tendered or quoted stages?
Is it in follow up the stage?
How many are in each stage, what is the confidence factor in each stage?
If you don’t have a confidence factor in each stage, your percentage of what that deal will complete and you can’t give me not only the revenue line, but that’s really vanity, but you can’t give me the expected profit out of it then I’m going to pick you very very quickly.
Again, not because I’ve got an ego and I want to give you a hard time, but it’s because I want meaningful norms.
I want you to be measured in that sales pipeline.
I really want you to have firm digits on that so we can see there from new inquiries to deal completion.
Ultimately, how confident you are as commercial or sales director is complete and what revenue from cash was spent and what profit from the bottom line that’s going to have.
So you can see that measurement and control how I started this video off about how important that is for you guys in the business.
Even if you’re a small business, even if a solopreneur, you need to have these type of control on your business.
Whether you hold the board meetings or not, internal management begin to know, you should have everybody.
If that’s just you, or you and your partner, a couple of you, you should all have key performance indicators, measurement criteria, that get pre-identified goals of your financial forecast that you need to be working towards.
If this sort of resonates with you, you think this is exactly what we need for really progressing business, we’re seriously committed.
I’m soon to be opening our latest round of entrepreneurial success, so, and this is a premium coaching programme.
This is for serious, next-level entrepreneurs.
The time commitment that you’re going to have to put in is high, the financial commitment that you need to invest is going to be high.
This is not a dozen a dime business coach from people who are pretending that they’ve been there, done it, people who have been dishonest about their business career, check me out on LinkedIn, you can see what I’ve done.
I’ve been a CEO of a PLC, two 6-figure exits, and a seven-figure exit.
I’ve also lost a twelve million pound business in administration as well as franchising business sixty-eight times, being quoted in fast track, and also raised over 1.6 million in venture capital.
So, if you want to work with serious professionals, people who have been there, real, worn the t-shirt and have real-life experiences.
Not these dozen a dime business coaches who have bought a franchise in business coaching because they’re following a programme.
That’s what they’ve been told to do or people who are telling you that they’re a business coach, in the 20-year-old and done a bit of multi-level marketing and think they’re a business coach.
You want to stay as far away from those people as you possibly can because they ain’t going to get you any results.
All they’re going to do is take your money and you’re going to move no further forward.
But for your serious, next level entrepreneur, and you like straight talking, honest advice, honest guidance to know your business, I would like to hear from you.
My name is Mike Midgley, I’m a serial entrepreneur with a strong, proven, track record.
Click the button below, you can head over to mikemidgley.uk
You can set up a 30-minute conversation with me, you can have a chat about the programme.
See if it’s right for you, and see if there’s a fit for myself and my team to work with you.