Many people in business believe that “everything either works for you or against you.” There is no middle ground for those that want to have a better business, and one very decisive way to do a simple yet effective analysis is to decide specifically what is working for you or what is working against you.
This type of analysis, if followed by action, can quickly improve any business. In less than a week business results will begin to show. Since fewer resources will be used, the business will become more profitable and more efficient.
First Hour
Take 45 minutes to decide what the goals of the organization are for the next year, the next six months, the next quarter and the next month. Break down the monthly goals to weekly, then further break them down to daily. There should be no more than five goals in any period of time; three is actually a better number. Take the final 15 minutes and decide what goal will be owned by which person in the organization.
Second Hour
Make a list of all the positions in the company and vendors, including any independent contractors used. Position by position, supplier by supplier; determine whether or not the contributions made and the results delivered are positive or negative. There can be no middle ground. When in doubt, the answer is they are not helping the business.
After completing the position and vendor analysis, make a plan to eliminate those positions and suppliers not contributing to the goals of the organization. Next to the positions and organizations noted as not contributing, make a list of the appropriate action to be taken, name the person responsible and the date that the action will be completed.
Third Hour
Based on what was completed at the end of the second hour, review, revise and update the organizational chart of the company. If changes are to be made, make a note as to when the new reporting structure will take effect as well as those responsible for implementation.
Fourth Hour
Take a long hard look at the vision of the organization. Does one exist? If not, now is the time to create one. Does the existing vision still work? Either it does or it doesn’t. If it doesn’t, change it. Review the mission statement of the organization. Does it still apply? If it does, create an action plan with dates to ensure everyone in the organization understands it regardless of their position or title.
Fifth Hour
Create a list of all current marketing activities. Next to each program, determine if that program or effort is bringing in the desired results. Either it is or it isn’t. Once that action is done, make a second list of only those marketing investments that are effective. Count that list and at the half way mark, draw a line; those programs that are above the line will continue to be used, those below the line are to be eliminated. In less than one hour the marketing plan for the year has been established based on what actually works best.
Sixth Hour
Rank each customer from highest to lowest revenue; rank a second time using profitability (highest total profitability to lowest). There should be a natural correlation between the two variables (revenue and profitability). Those that generate low revenue are hurting the business just as those providing minimal profitability. Make plans to eliminate those customers who are more costly than they are worth, or plan to raise prices to improve revenue and profitability immediately. Write down the date when this will take place next to the name of the customer.
Seventh Hour
Review the financial statements, taking time to focus on expenses. Is the expense necessary or is it simply “nice to have?” Eliminate the nice to have as those costs non essential and are working against profitability. Where did costs increase in the last year? Why did those costs climb? Can services and supplies be comparison shopped to reduce costs? Contact vendors (see second hour) and ask them for help to decrease costs going forward.
Last Hour
One of the most effective productivity and communication tools ever devised is the twelve month calendar, which will be created this hour. Start by listing all company holidays, significant marketing events including trade shows and sales meetings, staff meetings, advertising campaigns and associated deadlines. Once the format is established, and it is used on a consistent basis, it is easy to update and the NITMA (no one ever tells me anything) excuse can be eliminated. “If it is not on the calendar, it won’t take place” should be the company mantra starting right now.
To be sure, these activities will take a full day. But at the end of the day, a much better business, more focused, more directed and more efficient, will emerge.
Ken Keller, 661.295.6892
www.ExecutiveForums.com/kkeller
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