All businesses irrespective of size should have a vision statement. Depending on the size of the business this can be drafted by the owners or directors. In a larger business it may be prudent to seek input from key staff as well.READ MORE
Aside from the important basic KPIs that are attributable to every business, there are far more specific metrics that need to be monitored for every industry.
Too many businesses fail to produce adequate reports with these specific metrics which only inhibits growth. This is usually due to poor set up of accounting systems and administrative processes, which is often due to a lack of focus from the owner on items seen as ‘non-revenue producing or zero ROI’. Albeit these, in principle, are exactly that but have a huge intangible ROI that shouldn’t be overlooked.
Hospitality as an example has an enormous list of metrics that can me monitored and measured. Obviously, the size of the business will determine the time investment available to allocate to administration and only a large company will a full force of administration can monitor and manage all metrics in parallel, but in small and medium businesses there should be specific monthly, quarterly and annually goals to be achieved by implementing specific metric strategies one or a few at a time.
Examples of hospitality targets that are often forgotten or not monitored: –
Customer & Seating Efficiency – If you have a restaurant with 4 areas each with 4 wait staff, the booking team should be allocating tables to customers evenly across the 4 areas to minimise bottlenecks in the kitchen and ordering process.
Average Spend Per Head – Not only how much money is each person spending but how much money is each person spending with each of the wait staff. What is the associated incentive and target for wait staff and how does that tie in with the front of house managers target?
Bounce Rate – If 100 customers come into the restaurant and only 10 order food, the bounce rate is 1/10.
Basket Analysis – How many items are being ordered per head per table. How is management ensuring an upselling ethos is front of mind for all wait staff?
Implementing these strategies and new layers of KPIs will assist greatly in driving profit and by virtue of implementation, the management team will be forced into the 1% mindset.READ MORE
What separates a good business from an extraordinary one is the vision that is set by the principals that is not only shared with the employees but one which empowers them and enriches their work experience.
Good leaders have an innate understanding of this principal as they understand that no team, irrespective of their individual talents, will follow you unless they share your vision and are committed to being part of its execution.
It is this principal that establishes the drive within the team that also provides the motivation to succeed where many have faltered and failed.
Underpinning the achievement established through the vision is service delivery. No vision will ever be achieved without exceptional service delivery. By this it is imperative that the team understand that we must go beyond what may be considered adequate or normal service delivery and be so far in advance of our competitors that they simply cant compete on any level.
Additionally this cant be achieved without all team members forging strong relationships and bonds with each other, customers, suppliers and any other stakeholders that are critical to the entities success. Strong relationships build trust, without which no entity will succeed and more particularly achieve the status of an extraordinary business.
In developing your vision one must initially and constantly be assessing the risk factors that the enterprise will face from time to time. Being risk averse is akin to failure. It is critical that we take risks in developing our business, but these must be measured against potential gains. We will sometimes encounter risks for which we have not planned such as political risks where governments make decisions that create unwanted risk factors that impede or business strategy and vision. A strong team will manage such adversities and continue towards its goal.
We have said it before on many occasions that all businesses must be evolutionary by nature and may morph into something different to what may have been the original vision. For example Toyota started off making knitting looms and morphed into one of the, not only major motor corporations but one of the major corporations internationally.
The trick to evolving successfully is to adopt the principal of “Continuous Improvement” wherein we are constantly looking for ways to improve our business model, products, efficiency which all result in increased productivity.
Management should also recognise that it is not just continuous improvement of those items mentioned above but critically and more importantly it is the improvement of the team members that will create the drive to continuous improvement.
To quote Sir Winston Churchill:-
“To improve is to change, so to be perfect is to have changed often.”
Simple but really sums up the importance of having a culture of continuous improvement.
Whilst your vision may be somewhat global and may appear esoteric to some it must also have a sound foundation in the form of short and long term strategies and goals. These are documented building blocks that will include budgets, which should be set on a twelve-month basis and reviewed monthly with a six monthly update to take into account any changes that may require adjusting the budget outcomes.
The overall business strategy must also be documented and reviewed in concert with the budgets as the strategy is effectively the road map to achieving your goals and the vision which you have set.
Financial reporting also forms part of the review process and should be based on an agreed set of KPI’s so that accurate financial information is available in real time to allow for either changes to the budgets and or strategy based on management being reliant on the veracity of the information to make sound decisions that will affect the businesses future.
Whilst all of the above are fundamental to the success of any business there are also other intangibles that have a significant impact on outcomes. Foremost among these is the business culture wherein any sort of toxic culture will produce a toxic result whereas a positive and inclusive culture will always be the bedrock of the success of any enterprise.
The old saying that a fish rots from the head down, viewed in the prism of any business entity, simply establishes that good culture evolves from good leadership by management. You will never achieve your vision without establishing a great culture within your business.
We are often bogged down in day to day administration and fail to take time out to think and reflect on our business. We see this as an equally fundamental process in building and developing a business. Removing yourself from the day to day noise of the business and taking time out to think about the business is just as important as all the other issues mentioned above.