21 Critical Performance Areas of Your Business

These 21 questions will reveal the areas you must master if you are to maximize the value of your company... or even be able to sell it. They are the golden keys that when improved, immediately make running your company easier and that start putting more money in your pocket.
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Following are 21 questions that will help you and us better understand the degree to which your company is prepared to maximize your profitability, desirability to potential buyers, and salability when you decide to step away. Simply click the circle associated at bottom of each the column which best represents your evaluation of where you are.
1. WE ARE HERE
Managers work in isolation from other team members. New team members learn how to execute their responsibilities on their own by trial and error. No apprenticeship culture exists in the business, and everyone fends for themselves.
2. Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Every manager is actively coaching subordinate team members on how to execute their responsibilities. New team member are systematically apprenticed by mangers and a strong apprenticeship culture exists in the business.
1. WE ARE HERE
An Operations and Training manual is non- existent or hopelessly out of date. Team members do not consult with written documentation for information on how to execute their responsibilities.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
The Operations and Training manual is current and revised on a quarterly basis at minimum. Team members refer to the manual regularly for information on how to execute their responsibilities.
1. WE ARE HERE
Shareholders and managers operate on a reactive, fire-fighting basis each day, focusing on completing urgently important tasks firsts and working on high importance items whenever they can fit them in.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Every shareholder and manager operates according to a default calendar and prioritizes their activities based on high importance items first and urgently important items second.
1. WE ARE HERE
Shareholders have no objective, market- based valuation of the business and managers are not measuring and managing the company based on shareholder value. Business is not being marketed to qualified industry buyers.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Shareholders are monitoring the value of the business on a quarterly basis at minimum, hold managers accountable for increasing shareholder value, and are entertaining offers from qualified industry buyers to purchase the business.
1. WE ARE HERE
No one is proactively managing multiple recruitment strategies. The flow of qualified candidates applying for open positions is sporadic at best and the candidates generated are usually under qualified.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
A specific manager is managing and constantly improving the effectiveness of at least 10 recruiting strategies. The recruiting pipeline always has more then enough qualified candidates for open positions.
1. WE ARE HERE
Candidates are not screened using psychometric profiling bench-marks and a skills-based, test-drive process. Post-hire performance data is not measured and used to monitor the effectiveness of the hiring model and the mis-hire rate is very high.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
All candidates are screened using psychometric profiling bench-marks and a skills-based, test-drive process to screen out non-performers before they join the team. Post-hire performance data is collected and used to refine the hiring model.
1. WE ARE HERE
You have not identified key performance indicators and no metrics are being measured, reported, or managed with any regularity other than those deriving from basic financial statements. Team members have only a general sense for how their individual performance is making or breaking the business.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
You have identified the 5 to 10 key numbers indicating the performance of the business and are systematically measuring and reporting them on a daily or weekly basis. Every team member knows which numbers are being used to measure their individual performance.
1. WE ARE HERE
Team members have no commitment to eliminating wasted time, movement, and materials to compete more effectively. Efficiency is not measure, managed, or rewarded.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
All team members are rallied around a commitment to eliminate wasted time, movement, and materials to continually improve efficiency, cut production costs, and compete more effectively.
1. WE ARE HERE
Employees leave their passion, motivation, and creativity at home each day and contribute the minimum required effort to keep their jobs. Employees and managers expect base pay and benefits with nothing at-risk and no incentive to care.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Every team member has an incentive package that motivates them to work as hard as shareholders and managers. A blend of base and at-risk pay is used to incentivize commitment, and creativity and team members care about the business as if it was their own
1. WE ARE HERE
A written strategic plan has not been developed, so the vision, mission, values, and objectives of the team are poorly defined and constantly changing. Strategic direction and decisions are made by the shareholders without input from the rest of the team.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
A written strategic plan clarifying the vision, mission, and values of the team, annual and quarterly financial targets, and strategic objectives is monitored weekly by managers and updated with input from all team members on a minimum of a quarterly basis.
1. WE ARE HERE
No plan exists to identify and intentionally develop emerging managers and leaders as high value human capital. Long-term commitment is actually disincentivized by a turf-protecting culture and a win-lose approach to compensation.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
A plan to identify and intentionally develop emerging managers and leaders is carefully monitored by the shareholders and executives. All key stakeholders are incentivized for long-term commitment with a profit-sharing plan and a plan for leadership succession is clearly defined.
1. WE ARE HERE
There is no rhythm of regularly scheduled team meetings and the communication from shareholders and managers is inconsistent and inefficient. Off-site planning meetings are rare and decisions are communicated haphazardly throughout the organization.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
A rhythm of regularly scheduled team meetings for goal-setting, reporting, and accountability take place on a annual, quarterly, weekly, and daily basis. Decisions made by shareholders' and upper management cascade through the organization quickly and efficiently.
1. WE ARE HERE
Little thought is given to the system of workflow in the organization. No formal organizational charts or job descriptions exist. Role confusion among the team creates wasted and duplicated effort. Authority has not been clearly delineated or delegated, so work moves inefficiently through the business.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Managers carefully monitor the system of work flow in the organization. Organizational charts and job descriptions are regularly updated to prevent waste and duplicated effort. Everyone on the team knows their role and sphere of authority and work moves smoothly through the business.
1. WE ARE HERE
You pay little to no attention to strengths when assigning roles. Your team is plagued by lack of trust, unhealthy conflict, low commitment, and poor execution, yielding unacceptable business results.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
You are using a reliable system for placing your team members in roles best suited to their strengths and building them into a powerfully cohesive and committed team that delivers business results.
1. WE ARE HERE
Managers have no business plan to forecast cash-flow, determine working capital requirements, and calculate the company's ability to pay back debt and make a profit. Planning is done only in reaction to the immediate needs of the business.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Managers monitor and update the business plan on a quarterly basis to forecast cash- flow, determine working capital requirements, and calculate the company's ability to pay back debt and make a profit for shareholders and investors.
1. WE ARE HERE
Managers have allowed fixed costs to bloat and sales to decline to the point where revenue is below break-even, essential costs are not being covered, and debt is increasing continuously.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
The managers have implemented a plan to cut fixed costs enough to stop the bleeding and quickly spike sales to above break-even, so owner drawings and fixed costs are covered, and debt is being repaid.
1. WE ARE HERE
The managers have no month-by-month budget to forecast revenue and expenses and deliver desired earnings and owner drawings. Management and financial decisions are made based on bank account balances and sales estimates.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
The managers have developed a month-by-month budget to forecast the amount of revenue required to deliver desire EBITDA net of owner drawings. Management and financial decisions are made in consultation with weekly budget versus actual reports.
1. WE ARE HERE
Managers have allowed receivables to grow unchecked, vendors have tightened their terms, and price pressures and inefficiencies have cut gross margins. Cash flow problems are increasing indebtedness and investments are being postponed.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Managers carefully monitor their plan to improve collections, lengthen terms with vendors, increase prices as aggressively as possible, and eliminate operational inefficiencies. Cash is being used to invest in growth and repay high interest debt.
1. WE ARE HERE
No Unique Selling Proposition and a Guarantee exists in the minds of shareholders, managers, team members, clients/customers, and prospects. The only point of differentiation is price so the business has no significant value proposition. An unclear and confusing message is communicated by the team.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Shareholders and managers have identified and persuasively articulated a Unique Selling Proposition and a Guarantee to compel ideal clients/customers to pay a higher price instead of doing business with competitors. The entire team is aggressively communicating this message to the targeted market.
1. WE ARE HERE
Those involved in sales have no formal or tested sales process and their activity is not coordinated, measured or managed on a regular basis. There is a large gap between high and low performers. Sales force compensation is structured around salaries with little emphasis on delivering results.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
The sales force has a well-tested, carefully scripted sales process and their activity is coordinated with an appropriate customer relationship management software solution which measures and reports conversion rates and results on a weekly basis. Sales force compensation is based on actual sales results.
1. WE ARE HERE
No marketing plan exists to produce a predictable number of leads, improve conversion rates, increase the average revenue per transaction, and increase the transactions per customer. The results of spending on marketing and advertising is unmeasured and unmanaged. Managers are doing virtually nothing to proactively drive revenue growth.
2.Yeah Somewhat3. We are Kind of in the Middle4. We are Getting There5. WE ROCK THIS
Managers have developed an aggressive, measurable marketing plan to produce a predictable number of leads, improve conversion rates, increase the average revenue per transaction, and increase the transactions per customer so profits increase exponentially. Results of the marketing plan are being measure and improved on a weekly basis.