Archive for March, 2009

How to Align Performance to Corporate Strategy and Goals

Saturday, March 28th, 2009

It used to be that performance management was managed in one department. Today, performance management has spread throughout the entire organization, where almost every division must focus on performance management to some degree in order to be successful. Despite this wider range of performance management, enterprise-wide performance initiatives are not widely practiced. And without an enterprise approach, it is extremely difficult to align your performance to organizational goals and objectives.

According to software vendor SAS, a recent survey of 1100 businesses revealed that performance alignment was the PRIMARY benefit companies hoped to receive from their performance management efforts. Aligning performance to your organization’s goals and objectives is critical to your organization’s success. On the other side, lack of alignment increases inefficien­cies and risks and prevents optimal execution of the organizational strategy.

Think of this scenario as a model for linking corporate strategy to business objectives:

The executive board collaborates high-level strategic planning and identifies goals for the CEO and organization. The CEO then meets with his/her senior executives who in turn develop objectives derived from the CEOs goals and integrates those goals into the strategic plan. In turn, those executives meet with their managers who develop objectives derived from the strategic plan, and so on. Then, each subordinate goal is tied to one or more goals of their manager. Ideally, the final result is that every tracked goal in the entire company can map back to a corporate objective developed by the board.

Chances of organizational success are greatly increased by translating each high-level objective into a cascading series of focused performance measures. Using our previous example, the CEO may focus on net cash flow while the CFO looks at debt-to-equity ratio. The controller may focus on liquidity ratio, while the accounts receivable manager looks at days sales outstanding, and the accounts receivable clerk worries about percent of collections over 30/60/90 days.

This article discusses aligning corporate strategy to four key areas: departments/ divisions, workforce, finance, and systems.

Departmental Performance Alignment

Departmental performance alignment can be difficult when business processes within an organization span across multiple business units and functional support groups. To avoid bottlenecks, finger-pointing, and redundancy of work, shared performance measures that align people across organizational boundaries must be identified and responsibilities accounted for. For instance, a performance measure that includes percent of collections over 30/60/90 days might be applied both to accounts receivables clerks and sales representatives, thus sharing and integrating performance measures, encouraging collaboration and boosting overall performance.

Workforce Performance Alignment

When workforce performance is aligned with corporate objectives individuals in an organization develop a stake in that organization’s performance. Employees at every level are measured by something they understand and control, and that same measure is clearly linked to the goals of their direct supervisor and the organization as a whole.

Financial Performance Alignment

In an economy where results need to be achieved fast and investor confidence is low, CFOs and finance organizations are implementing integrated performance management to improve information quality and visibility. One challenge organizations face aligning performance is finding financial measures that are meaningful to those responsible for carrying out the work. Using the previous example net cash flow is a critical performance measure for executives, but it probably means very little to the accounts receivable clerk who has no idea of how their contribution improves net cash flow performance. Stick with simple financial metrics that employees can understand and control.

System Performance Alignment

The IT/IS department’s role is to provide technical support for the entire organization. While we know that this alone is a complex task, today’s business model requires systems to not only support users, but to align technology to meet the business needs of the organization. Understanding business unit objectives and translating them quickly and accurately into IT priorities is essential today. So how does an organization measure how well their systems are aligned to organizational objectives? By implementing vehicles for aligning and measuring IT performance, such as service level agreements, performance-based contracts, and products and services catalogs to generate reports that illustrate how well they are measuring up to business objectives.

If you can move closer to aligning performance in these areas your organization will be well on it’s way to surpassing all of it’s goals and objectives. While the goal of a performance initiative is to align performance to organizational strategy, it is most important to maintain flexibility and adapt to organizational changes quickly.

The Strategy Behind Finding the Right Client

Wednesday, March 25th, 2009

I work with a lot of small and medium sized businesses. The reason I do so is because I believe in them first and foremost. I believe they represent our future here in North America because they represent economic diversification and they find opportunity in areas big business won’t. Finding that niche market isn’t easy and sustaining it can be even harder. What I do is help sustain.

In the business world today, Small and Medium Sized Enterprises (SME’s) have a few common issues: they have limited resources; very smart and capable people; insufficient demand; and they’re excellent at what they do-at least operationally.

When it comes to strategy, many SME’s understand they should have one and yet the implementation seems always to be on the B list of To Do’s.

One of the problems that crops up in strategy sessions is the perceived need of being all things to all people. Doing this is expensive and risky. What you want is a better understanding of Who your business really wants as a client and then develop the strategy to support the way you go about marketing and distributing your product or service.

If you can think of the market as having three kinds of clients you’ll see better what I mean.

We all will have a primary motivation and some secondary motivations behind that:

  • Cost Conscious
  • Service Conscious
  • Gadget Conscious

People carry some blend of these with one of them being dominant. Think of yourself when you go out to buy something-it’s not typically just the cheapest, or just the best service or just the newest gadget; it’s often a blend of the three.

  • Do you need the latest and greatest and are you willing to pay a premium for it? And do that again when the next generation arrives? And again?
  • Or do you need something that works well, lasts forever and you’ll pay a premium for that?
  • Do you always buy something somewhere that’s more expensive (in terms of time or money) than elsewhere but you go just because the service rocks?
  • Or do you need something that will fill the gap right now and all you need is the least expensive version out there?
  • Do you buy somewhere that’s always the cheapest even though the service is terrible and the place a mess?

These are all combinations you need to consider in your business so you can build a culture within to support the combination.

Cost Conscious: Your competitive advantage comes through effectively reducing costs; therefore your emphasis in your business supporting the cost conscious client is one in which you must value quality, safety, productivity, internal reliability, efficiency and systems. You need to eliminate problems, mistakes and costs. Customer support must be reduced and expectations will have to be managed accordingly. Disciplined teamwork and efficiency will be something you want to focus on. You need the right kind of people in place to do this.

Service Conscious: Finding solutions is the emphasis here. Building lasting, profitable relationships is key and customization is the way. The Principle of 80/20 is top of mind where you understand that 80% of your profit comes from the top 20% of your client base. You know who these clients are and put your best people on them. Regular contact and targeted referrals will grow your business well. Don’t make the common mistake that the clients who you end of talking to the most are always the most profitable—sometimes these are your biggest strain on scarce resources. Evaluate the numbers and understand the metrics. Sometimes you’ll be surprised that you’ve never even heard from some of these people. But you want them to understand you value their business and you want to treat them well. Values which support building relationships and focus on the client are items you need to promote. You need the right kind of people in place to do this.

Gadget Conscious: Delivering the Next Generation Of has its merits for those who care. This is the next generation of planned obsolescence. Delivering the Next Generation ahead of your competitors means you need to prepare your markets to spend money on things that may not have existed before. In today’s technology driven world this happens faster and faster. It means when you’re building your business you must to focus on creativity, R&D, new ideas, concepts, design and timing. Your people need to be focused on the future, enjoy experimentation, engage in dialogue, talk ideas out and be open to new ideas. You need the right kind of people in place to do this.

How do you get the right kind of people in place to do this?

First of all, understand you can’t just put all your eggs in one basket-you need to have some level of price consciousness even when your service levels are the best in the industry. And despite the best service in the world—no body will buy from you if the product doesn’t hold up to the client expectations. You also have to solve the client problem at some level when you’re competing on price-you just have to make sure you don’t have many client problems through decent quality, managing client expectation and lots of FAQ’s so clients can solve the issue on their own without your intervention. So it’s very important to have the right kind of people in place doing things in your business to support the function. It’s the blend that makes the difference.

There are two ways to get the blend right: Your strategy around hiring needs to incorporate the appropriate questions, understanding and evaluation to understand better who you’re bringing on board in what role. This will sustain the future.

For your current staff you can undertake an evaluation of what their values are to ensure the values are aligned to meet the needs of the business. If you’ve not been aware of this in the past—expect that you’ll be perceived by those whose values aren’t aligned with those of the firm to be rocking the boat. Eventually they’ll move on…and it’s best for both of you. What you’ll loose in misaligned values you’ll gain in better relationships with your clients-regardless of which motivation rules their behaviour.

Why Good Employee Training is Essential For Business Success

Sunday, March 22nd, 2009

Employees are the lifeblood of any company, as all business owners and managers are well aware of: good ones know what their job responsibilities are, how to use their time effectively, and what their bosses expect them to accomplish on a daily basis. But good employees don’t usually happen by accident: they are made good through effective employee training.

Unfortunately, many companies choose to cut fiscal corners in their training departments, hoping that their employees will simply learn as they go. This is a risky strategy, however, and many workers simply fall through the cracks: bosses assume they know what to do, when the employees’ performance clearly indicates otherwise. Here are some ideas to help jump start a training program for small business employees.

– Put training back into the company budget. If training becomes a priority, Human Resources will have the freedom it needs to develop a strategy that will see to it that workers get the training they need to perform more effectively. The owner and managers all need to be supportive of those in charge of developing a training program, and need to make sure that there is money earmarked for this purpose and this purpose alone.

– There must be a consensus on what the needs are when it comes to training, and because funds are no doubt limited, the program should focus on these needs first.

– Do not implement any large-scale training program before testing it out on a small group first. This just makes good common sense: something may look great on paper but end up being a disaster in practice. Small-scale testing will provide the feedback necessary to fine-tune the program or overhaul it altogether.

– Choose your training methods and accountability system carefully. There are plenty of ways to train employees: you can run a mentoring program, bring in a professional trainer, or set up online training classes that can put them through a graduated skills acquisition program. Many businesses choose a combination of the above, to give their employees a variety.

– Make sure that the training each employee receives is relevant to his or her duties: putting everyone through the same program may not be appropriate and employees will tune out if they feel like they are being made to learn skills or knowledge they will never use.

– Follow up with training by employing a measurement system to assess the effectiveness of what employees are learning. You may also want to implement a computerized system that can track the successful completion of training, both online and through other methods, by individual employees.

Having well-trained employees means lower worker turnover rates, a more content work force that has an investment in the successful accomplishment of their daily tasks, and a more professional environment overall. Employee training is well worth the effort.

Can Management Systems Be Effective If They Are Not Integrated?

Thursday, March 19th, 2009

Management systems like ISO 14001, occupational health and safety,  ISO 9001,quality,  food safety or HACCP and financial management can very readily be integrated.  All the systems except quality  are risk based and should use a consistent risk management tool within a business. In the new carbon constrained economy the business can also include its accounting for its carbon footprint as part of its environmental sustainability.

What is crucial to making an integrated system work effectively is having straightforward procedures that are process based and cover all risks with a single reporting mechanism for the initial report of incidents, near misses and suggestions. Workers easily become confused by too many forms and instructions and then ignore them. In many cases having more than one different stand-alone systems can even be directly conflicting for the workers involved.

During the implementation phase you do need to separate your decision making about different activities because the risk of environmental harm from a single activity many be very different from the occupational safety risk of the same activity. An example in the agribusiness field would be the use of hydrogen peroxide which breaks down readily to form water and oxygen. This is so environmentally safe that it is even approved for use in organic farming. However from an occupations health and safety viewpoint it is a very hazardous liquid because it breaks down too easily and can extremely dangerous for personnel to handle in larger quantities.

In a case like this, the highest risk is what is managed in all circumstances and instructions, training, checklists, maintenance, equipment and contingency planning are implemented so that they cover the worst case scenario.

One of the biggest pitfalls for a business with a fully integrated management system can be inflexible Government inspectors from organisations like the national quarantine inspection service, the work place safety inspectors and the environment protection authority who only want to see their own issue and have no real concern about the effective operation of the business outside their narrow tunnel. The pressure that these people assert needs to be resisted without alienating them because they are present for only a few days and are not the people with the responsibility for managing the business and making a profit so that the business remains sustainable. One way that usually appeases these people is to separate the different forms of incident report into separate files so that those inspectors need only look at their own area. There are also real business benefits from this separation because it is easy to analyse problem areas and build in continual improvement.

It is hard to see how a mix of management systems can be truly effective if they are not integrated while a fully integrated management system is simply the way that the organisation does business.

Employee Performance – Getting Things Done Right the First Time

Monday, March 16th, 2009

Why is it that some employees can’t seem to get anything right? You think back and you know you gave clear instructions but for some reason the output does not match your request. Did you ever consider that your instructions are really not that clear? Or maybe that the employee is afraid of you and can’t think straight when they have to complete a project for you? Or worse, they don’t really care about their output and don’t spend the time researching for accurate results. It could be any number of reasons. Let me give you a scenario.

One afternoon Sally told Bob that he would be receiving some invoices in the next day or two. Sally sent an electronic copy of all the invoices for his reference. Now these invoices were all from the same vendor for a particular service that had been provided to the company. Bob was required to process the approved invoices once they arrived and send payment to the vendor as usual. About four or five days later, Bob reached out to let Sally know that he never did receive the approved invoices and furthermore, this vendor could not be paid unless they were added to the company database as a vendor/payee. Sally was furious because this particular vendor had been doing business with the company for 4 years and had received payment just 4 months prior to this occasion. She explained this to Bob but he insisted on getting the required information to add the vendor to the database. In the end, after numerous emails and follow-ups from Sally, Bob had to apologize to for two reasons, the vendor was indeed already in the company database and the invoices had been received and paid. If only Bob had spent some time researching.

Here are some things you could do to help your employees get things done right the first time.

Provide detailed instructions for complex tasks. If there is no room for creativity on a task then you need to ensure that your employees know exactly what you want them to do. For example, let them know what parameters you want them to use when running a report and how you want to see the results; table, graph, chart all the above.

Avoid the fear factor. Because I said so is not a sufficient way to get through to adults. As a manager you need to be focused on how to manage adults. It is not the same as handling children although, you must admit, sometimes it feels that way. Keep in mind that you want your employees to respect you rather than fear you. Respect draws out positive attitudes and results from your employees. If they respect you, they are more likely to do things right in order to gain your approval. They will care about their output and will ensure that they give it their best effort.

Train your employees to research. It’s important to give your employees ample time to complete a task whenever possible. Even with a time crunch you should encourage your employees to verify any information they compile and provide to you or anyone else within the company. They need to use the documentation you have in-house or use the Internet. Teach them to realize the importance of accuracy; nobody wants to be caught with their foot-in-the-mouth. In Bob’s case above, all he had to do was research what Sally said concerning the previous payments to the vendor.

Understand that you are not always right. This is true and we know it. In so many situations employees’ thoughts, suggestions and ideas are undermined as unimportant or incorrect while you as their manager expect them to take direction without question. Service and Sales representatives have been taught that ‘customers are always right’ and that there is a proper way to agree with the customers and then go on to correct or clear up any misconceptions they may have. In reality you are the customer is some situations and in others, your employees are the customers. Respect each others knowledge base and learn from each other.

There are no stupid questions. Finally, if you want something done right you have to be able to allow your employees to ask anything they need to ask to ensure that this is case. Be patient even when the question seems silly to you – you know, those questions that make you want to say…”Are you kidding me?” Patiently reiterate what you need done and then let the employee handle it from there. It is better to take a deep breathe and go through this step than to have the employee do the task over. Get it done right the first time!

Green Business Directory

Friday, March 13th, 2009

The first feature of a high-quality green directory is an abundance of content and information. It is important to provide the name, number and website of a business, organization, or event on a directory. However, a good directory will have additional information about the business, organization or event. This information includes the address, why they are included in the green directory, and a map to view the location.

The second feature of a high-quality green directory is the simplicity of finding the business, organization, or event that you are looking for. Some directories make it very difficult to find the correct information. A high-quality green directory will have a number of different search options like a quick search, map search, and advanced search. If you can’t find what you are looking for with one search, you will find it with another search.

The third feature of a high-quality green directory is a good support staff. There are many directories that don’t answer questions or help out with problems. If they ever get back often times it is weeks later and the subject has already moved on. A good support staff will respond within a day or two and businesses, organizations and events will be added into the directory when requested.

The final feature of a high-quality green directory is achieving an abundance of traffic. If there are no visitors to the directory what is the benefit of having all that content and information? The high-quality green directories will have high search engine rankings on Google, Yahoo, and MSN.

Do You Feel Successful?

Tuesday, March 10th, 2009

As a Business Coach, I talk to a lot of business owners in my day. Business owners are people who started out with a dream, an idea for what they’d like their business to become. But relatively few of them “feel” successful, regardless of how their business is performing.

I’ve found there are two major reasons that people feel unsuccessful:

1. Not having worked out measures to determine when you’ve attained success.

If you haven’t sat down and really planned where you’re going, in life and in business, it’s hard to know when you’ve “got there”. Many people have vague ideas of what “successful” is to them – ‘being rich’, ‘having time to do what I want’, or ‘being the best in my field’, for example.

You need to define what those things mean to you – are you rich when you have a million dollars in the bank? When you have an income of $200,000 a year? $100,000? Break your goal down into small, achievable steps, and celebrate them when you attain them.

It’s no fun feeling like you’re not “successful” every year that you don’t make $200,000, but what if your goal was instead to increase your income by $25,000 every year until you got there?

2. What’s going on outside you and what’s going on inside you don’t match.

You might have made your million, and achieved what you defined as success. But something’s wrong: you still feel unsuccessful. Maybe, in making your million, you neglected some other area of your life that was important to you. Maybe what you wanted all along was more time with your family, not a million in the bank. Maybe your definition of success includes both, and you need to work on that.

The important thing when setting your business and life goals is to be true to what you really want, regardless of what you think someone else might call success, what you “should” do, or even, sometimes, realising that your goals may have changed.

What you wanted five years ago might not be what you want now, and that’s okay. Be ready to change your goals when they’re not working for you any more.

Bottom line…

If you know what you want, how you’re going to get there, and celebrate your wins along the way, you’re much more likely to know when you’ve “got there”, and you’ll get there faster as well.

Fireproofing Your Business

Saturday, March 7th, 2009

I recently watched a movie titled ” Fireproof your marriage”, after viewing the movie, I remember feeling how this could easily apply to your business. I’ve spent a lot of time thinking about the similarities that exist and some apply and some don’t. I think what the movie did was to stimulate my thought process and make me examine my business from a whole new prospective.

You hear about all the business’s crumbling and closing down and your first thought is how terrible it is. When you take time to consider the facts, you realize that no business crumbles in a day. It’s more of a slow fade that takes place over an extended period of time. Now I’m speaking in general, there are always exceptions to every rule. For instance if a military base closed in your town, or a major business, it could cause a number of business’s to close. For the rest of the businesses, there are more concrete reasons to be examined.

As business owners, we are exposed to a number of privileges, with privileges comes accountability. It is easy to get carried away with taking liberties and privileges when your business is booming. Unfortunately, we tend to overlook the parasites that lodge themselves into the heart of our business while we’re playing and living the good life. These parasites are greed, obsession and power. Sometimes it’s never enough, we make a hundred thousand dollars and think, ” I could make two hundred thousand”, and our focus is constantly on more. It’s natural to want to grow your business; you just don’t want to grow it at the expense of your staff and life. As business owners, we obsess over our competition; we’re always checking on them, trying to one up them. Lastly, power, we’ve all spent time reading our own press and believing it. It’s not intentional; it happens over a period of time, it tends to erode our thought process. We forget about our team, our staff, we feel as if it’s all about us. This is a very dangerous path to forge; it’s the path to the slow fade.

I think the key to every business is the heart, without heart and soul; a business is nothing but a shell. You as the owner represent the heart of your business, as you go, so goes the business. You have the ability to guide your business in any direction you choose. It’s not easy holding yourself accountable to a higher standard than everyone else. Leading is hard work and requires discipline and dedication. All eyes are on you; being off your game is not an option. Every day presents a new opportunity to shine and grow your business. You provide the foundation that your business is built on.

There are two paths we can choose from, one is wisdom and the other is consequence. Wisdom is a huge front-end investment in time, obedience and consistency, while consequence has a huge back end, consisting of pain, lack of discipline and regret. Devoting the time to properly train your staff, where you work together as a team, sharing a common goal. Where your staff works with you and not for you, contributing to the shared goal of being the best. Many people run the race, only one wins. It takes discipline and integrity to compete and win. Anyone can win the race once, maintaining a winning level is an attitude in discipline. Holding onto the title is a feat not often achieved by most. It takes strong leadership, and a strong will. How does your team stack up in the race? Do you have the staff in place capable of maintaining a standard of excellence? It all starts with you, and your commitment to excellence.

Business Traits For Women

Wednesday, March 4th, 2009

What traits should women develop to excel in business? You need a lot if ever you would want to get into this world mostly dominated by men. It takes a lot of courage and generosity for any woman to compete. And if you are that kind of woman, the following traits can help you stay afloat especially in these trying times.

Perseverance Perseverance first before anything else, says one woman entrepreneur whose business is into custom printed booklets. In fact, her booklet printing company took 5 years before it was able to get many customers to come regularly to her shop.

It takes many years before one can bear fruit as a business. There is really no instant formula for success. So be sure to be ready for the long haul because in order for you to survive, you need to persevere to see the fruits of your labor later on.

Passion Women are associated with this particular trait. As passion goes, you need to have excitement and zeal in every business venture you undertake. Nothing can be achieved without passion. You should be excited to wake up every morning because you know you are going to attend to business matters for the rest of the day.

Patience Results are not made overnight. It takes patience to find out if you are in or out of the competition. Especially for the custom printed booklets entrepreneur, she says that with the advent of digital technology, there are so many booklet printing companies that have surfaced in just a few years. According to her, there are many websites where one can go to have their custom printed booklets reproduced that it is hurting many booklet printing companies’ offline. You just need to be patient so people will see the difference in the kind of service you provide.

Again, there is no such thing as instant success. Even Fortune 500 companies that have been in the list for so long have started from scratch at one time or another. It takes a lot of patience and perseverance to continue moving on even when the times are getting harder and harder.

Creative Do not be afraid to think of new ideas and update your business knowledge. Be more creative when providing solutions to problems. And be sure to look at things in different ways. Profits are made from different angles – be it financial, social or environmental. People in general can make changes even when the times are hard. No matter the climate or how small your business, you have to put on different shades to your business to survive the economic crunch.

Partnership To be successful, you have to pull in many skilled and knowledgeable people to help you with your business. Do not be afraid to ask for advice from those who already know the ins and outs of the industry. Be sure to get help from those who have the skills and specializations that you do not have. Hence, you should determine your strengths and weaknesses so you can provide balance in your business venture.

Balance Women in particular are very good at creating balance in their lives. It is especially demonstrated in how they have been able to have both a career and a family life. In fact, women are known to have been successful because of their capacity to balance both their feminine and masculine side. Thus, women have the natural capacity to go deep into relationships with clear thinking and strategy.

These are just some of the traits women entrepreneurs should have in order to excel in business. If you think you have what it takes to be a business owner, then go ahead and show what you can do. Women can succeed, and they do mean business.

A Residual Income Business Has Multiple Benefits

Sunday, March 1st, 2009

People constantly wonder what will happen if they are forced to take an extended leave of absence from their work; how they will make a living. Some people wonder if they will ever be able to go on a prolonged vacation and still earn a nice income. After all when you are on vacation or on sick leave you aren’t working, so how can you earn a living without working?

The answer to that is “RESIDUAL INCOME”!

What does residual income mean? Recurring payments that you receive long after the initial sale is made, usually in specific amounts and at regular intervals.

If you have a residual income business, you don’t have to worry about the above. Even If you are – God forbid – sick for an extended period of time, or if you decide to take an overseas vacation for a month or so, you will still be eating the fruits of your labor. You see, you worked for one week, one month or one year, and you can reap the benefit from this work years later.

You can benefit from a residual income business even if you plan on working three hundred sixty five days a year. In a non residual income business you only earn money for the time you put in or the product you sell. However, with a residual income business you may put in time and resources now and you will still reap the benefits years later.

Let’s say for instance, you’re an insurance broker and you get a commission of the premium. When you convince the customer to buy the policy, you instantly earn money for the work you put in. From then on you will earn commission every time that customer pays the recurring premium fee. The same is with every residual income business; be it real estate, internet marketing business, MLM business etc.

If you are a regular salesman who sells home products, or if you own a store that sells electronics, you only earn money when you actually sell a product. If you are a paid employee then you only get paid for the hours that you actually invest. If you decide to take a vacation you will lose your source of income for the time being.

This is why I would suggest that before you go into a new business, you consider the above information about residual income business. Consider if you want to be tied down to your work all the time or you want to be able to take time off when needed while still earning residual income from all the work you put in. Consider if you want to be the one who dictates when and how long you work and when you may spend time with your family. Consider if you want to be able to go on vacation for some time during the year and still earn money.

If you feel the same about residual income business as I do, you should definitely look into it. You can find lots of information about residual income businesses online, especially about internet marketing and MLM businesses.