What are the tried and true strategies of the best performing businesses?
“How can I make my business better?” This a question we at Accounting Professionals commonly get asked by clients and it will come as no surprise that for even the best performing businesses, there is no silver bullet.
Businesses that consistently outperform their peers take a holistic approach by focusing on the ‘One Per-centers’ to improve and grow. Sustained business improvement comes from doing 100 things 1% better, rather than doing 1 thing 100% better.
However, the best performing businesses understand that real business improvement comes from a structured approach to management with a ‘Measure, Monitor, Manage’ approach to each of the core building blocks of every business – Operations, Finance, Marketing/Sales & Strategy – without looking after each of these, the rest of the business will always struggle to thrive.
Through our business improvements programs, we take this structured approach to create the responsibility and accountability needed to drive businesses to the next level and achieve the goals they always thought impossible.
The key areas the best performing businesses focus on and do better than the average include:
- Regular meeting rhythm
- Goal setting
- Strategy planning and implementation
- KPI’s & measuring what matters
- Technology and optimising efficiency of operations
1. Meeting Rhythm
This comes back to responsibility and accountability – the best performing businesses have a set & forget meeting rhythm where everyone knows when and where they will be required and when they will be responsible for delivering key action items. This is the first step to meaningful action and improvement and without the set regularity (same day, time& place), the meetings and therefore accountability fall by the wayside.
Regular meetings should include:
- Weekly toolbox meetings with the whole team
- Monthly performance review meetings with key management
- Quarterly strategy review meetings with owners, boards, and mentors
The next critical item with all meetings is to have an agenda circulated before the meeting and someone dedicated to documenting and circulating the action items afterward – without an agenda, meetings lose focus and purpose. Without the action items, businesses miss the execution piece as follow through suffers.
2. Goal Setting
Goal setting is important for business improvement as it gives you long-term vision and short-term motivation. Successful business owners set both personal and business goals which feed off each other and then make themselves accountable to these goals.
For most business owners, profit is not the biggest motivator – it is what the profit allows you to do that motivates. Start talking about things like holidays, caravans, Maserati’s and boats, however, and you will see motivation levels and willingness to be accountable change almost overnight.
Whenever we work with business owners on adopting the strategies of the best performing businesses, the starting point is to understand their personal goals and then go on a journey to make their business the facilitator for achieving these goals.
3. Budgeting & Targets
Once we know the goals we are trying to achieve, it becomes important to set budgets and targets for the business that will allow us to achieve these goals. Most business owners don’t even have a target for the year – the best performing businesses do this as a matter of course as part of achieving their goals and remaining laser focused.
An effective budget allows a business to:
- Have a level of control over the finances of the business
- Have the ability to fund its current commitments
- Gain confidence when making financial decisions
- Set up the business’s future
- Break the targets e.g. revenue, down into smaller more manageable chunks to ensure execution
Too often we see businesses set a budget and then never track back to it, or even give consideration to the strategies required to achieve it.
4. Strategy planning and implementation
The best performing businesses are fully aware of what their overall strategy and objectives are and know where they want their business to head. Then they take steps to implement the strategy to achieve the result. An effective strategy creates cohesion within an organisation and a sense of purpose about why you are doing what you do.
Effective strategy doesn’t happen by chance, it comes from having a set forum where the business owners, board members and/or consultants come together to consider the current position and strategy of the business, the successes & shortcomings and what is going to be required into the future (see point about quarterly meetings).
Not every strategy will work all the time and sometimes businesses need to pivot and take a new direction, however, it is important to stay the course and commit to the current strategy knowing there will be a forum to review and consider whether a change is needed.
The best-performing businesses stop themselves from running down every possible tangent that presents, knowing they are only jeopardising the master plan.
5. KPI’s & measuring what matters
Key Performance Indicators (KPI’s) are critical in allowing businesses to measure their performance and determine if their business is on track to achieve their goals. Businesses that have transparency within their numbers and know how they are travelling perform better than the average as they can trust these numbers to influence their strategic decisions.
When talking about finance and numbers, many business owners bury their head in the sand as they don’t feel they understand what they are looking at – this is mistake number one!
Fix number one, however, is to focus only on the numbers that really matter and drive the success of your business. Accountants are great at producing pages full of numbers that mean nothing to anyone except them, but the clever business owners engage with their accountants to understand which are the handful (we like to say five) of key numbers or KPI’s that have the biggest impact on their business. Once they know these numbers, they track back to them regularly and use them to make strategic decisions to ensure success.
With the advent of cloud technology in the business world, tracking these KPI’s has become easier than ever, with the ability of business owners to use third-party business intelligence tools to report in real-time graphical ways to make it easier to understand.
6. Technology and optimising efficiency of operations
Using technology to do the heavy lifting in your business can have the impact of optimising the efficiency of operations and reducing time spent on all sorts of day-to-day tasks that were previously done manually. The less time spent working in the business allows more time to work on the business to work towards achieving the owners’ goals.
At Accounting Professionals, we are big believers in using technology to automate previously manual tasks throughout all areas of business and consistently see the impacts this has on the businesses that outperform their peers – thinking strategically about the use of technology in your business has the potentially to go a long way to achieving your goals, especially if one of them is to restore work-life balance!
The best performing businesses are continually seeking improvements through their business by improving themselves as business owners. Through our Cash Improvement and Board of Management Programs, we work with business owners at all stages to help achieve their goals through the Measure, Monitor, Manage process.
Talk to us today to learn more about how to become a ‘best-performing business’ and take things to the next level.