Creating Your Formula for Selling a Small Business
A Deeper Dive Into Improving the Drivers that Affect Business Value
Consistent Application of Accountability and Feedback Metrics (Part 4 of 4)
This month I’m covering specific things you can do in your business to increase its value, make it more salable and make it easier to do succession. In this post I’ll be discussing the last of our four topics, the application of accountability and feedback metrics.
Oh accountability! It is probably one of the attributes for improving performance owners least like dealing with. I suspect this because it means they actually have to take action with their people and as I noted in the last post most don’t like doing that. And accountability means that an owner might actually have to hold him or herself to that same standard too!
It’s one of those cruel little inconsistencies that advisers see in their clients all the time. The owner wants everyone else to do the best job they can do but he or she is unwilling to do the unpleasant task of actually holding those same people or themselves accountable to the standards they claim they want seen done. (By the way don’t ask we advisers if apply these principles to our practices because we act just like our clients with our businesses!). Like so many things in life – losing weight, getting into shape, trying to break a habit – it is a matter of personal commitment and will. It’s also a matter of having the data/metrics you need to measure performance.
Let’s deal with the latter first. Without objective data, it is extremely hard to make the accountability process work. Without data we are subject to opinions, feelings and impressions. These are notoriously unreliable. When there are measurements, it is much less emotional and subjective as to whether a goal is hit or not. Not everything can be put into empirical measurement but a lot can and those are frequently important to the business’ overall performance. Once one has measurements and metrics, one needs to look at them on a regular basis, and study their significance in the context of the overall business.
A simple form of accountability is tying behavior to measurements. Sports offer an example. If I’m a runner, I have time targets for the distances I’m competing in. When I work out, I will have certain workouts I need to do…distance, speed, endurance, etc. If I want to achieve my time performance goals, I have to hold myself accountable for both doing the workouts I have organized and for the performance targets I’ve set within those workouts. The same principle applies in business. We set overall goals that can be measured, sales and profits for example. We establish activities that need to be done – make sales calls, get out a certain number of proposals, produce a certain amount of product with a certain amount of labor, etc. – and targets that can be measured that show our progress in accomplishing those activities. We review consistently, help those who are not hitting their targets, acknowledge those who do, and revise goals and measurements as experience shows you.
As with the preceding three topics, you can find whole books written on the subject of accountability and the use of metrics to drive performance in business and I doubt you have the time to become an expert. So my advice is to start small and simple. Find a few things that 1) are key to your business’ performance, 2) you have the data available for measurement, and 3) you can implement with only a few of your people including yourself. Commit yourself to a regular time for analyzing what’s going on. If you find that you are not hitting your targets, dig into why. Set actions that can be taken get improvement. Accountability should not just be holding people responsible but providing the analysis necessary to change actions and get the results desired.
Contact me at michael@podolny.com if you fell that accountability of the lack of it is something that is holding you back from building the business value you need.
No comments:
Post a Comment