|You may be subject to the tyranny of the urgent. You may spend your time primarily working on tasks below your pay grade and not enough time on the strategic areas of your business.||Top-performing company leaders spend the majority of their time working ON their business rather than IN their business. They delegate most tactical activities and fire-fighting activities to other employees and concentrate on activities|
that have the greatest impact on their business.
You have either not clearly defined your company vision or have not aligned your employees to work toward your vision. Without a clear vision of where your company is going, how are you going to know if you have gotten there and how are your employees going to help you get there?
|Top-performing business owners start with defining their Personal Vision of success. They then write a Company Vision that aligns with their Personal Vision. Their employees understand the Company Vision and are working together to achieve the vision.|
You may not realize that your employees’ engagement is the most important factor to the success of your organization. Or you do but do not know what steps to take to create a great culture and an engaged workforce.
|Top-performing companies realize that their employees are their most important asset. They develop career paths for them and assess their engagement and performance regularly. All employees have well-defined job responsibilities and know how their work contributes to the success of the company. The company communicates regularly with employees, has a transparent culture and encourages intrinsic motivation though the management team.|
Your sales revenue is not predictable. Some years you grow, some years you’re flat and some years you decline. You cannot make good business decisions without a predictable growth model. Potential acquirers find revenue “choppiness” to be unattractive.
|Top-performing businesses are good at forecasting revenue growth targets and have the execution consistency to meet or exceed their goals year-over-year. They have a diverse customer base, a proven sales model and they run their sales department from a sales plan.|
You do not have a strong brand. Strong brands attract customers at a cheaper cost, retain them longer and allow you to charge more for your product or service. Your customers may leave when they find a cheaper alternative.
|Top-performing businesses have developed a brand that means something to their marketplace. Prospects are attracted to their brand and refer others to their product or service. Top-performing businesses seek to reinforce their brand through every decision and action that they make.|
Your product or service does not have a significant measurable point of differentiation from competitive offerings. Your customers and prospects do not understand the value your offering gives them vs. the competition. They may leave when they find a cheaper alternative.
|Top-performing brands have identified measurable benefits that differentiates their products or services. These points of differentiation are understood by their customers and prospects. Their differentiation is substantial and is based on more than just “good customer service”. Customers place a high premium on these points of differentiation.|
You have not demonstrated a track record of consistently generating healthy profits and cash flow or do not know what profit averages are for our industry. You may be focused on revenue alone and/or have not identified operational efficiencies that lead to healthy profits. Only businesses that demonstrate consistent and healthy profitability will survive. Or you may have profits but are taking too much out of the business making it vulnerable to future downturns.
|Top-performing businesses forecast profits and cash flow first and budget expenses to attain the budgeted profit and cash flow. They review their financials and financial ratios often and take actions when necessary to generate consistent profit. They have enough retained earnings and cash to allow them to operate the business during a downturn and do not drain the company of cash. They also generate sufficient profit to invest back into the business.|
You may not know what your customers think about your service, you take your customers for granted or you have not created the culture and training required for your employees to provide great service. The majority of customers leave not due to your product but because of perceived indifference to them.
|Top-performing businesses place a premium value on their customers and on their employees. Their employees are engaged, aware of their role as brand ambassadors and provide exceptional service in all interactions with customers. They provide a culture and the necessary training to achieve high service standards. They consistently measure service levels, why their customers leave them and the engagement level of their employees.|
Your business is dependent on the skills and tribal knowledge of one or more key employees. If they leave your business, you will likely lose customers, experience delays, suffer service issues and it would require you to spend more time working in your business as a direct result.
|Top-performing businesses have taken the time to formally document all key processes. They have also cross-trained employees in most areas of their business. While it is not easy for any business to lose a key employee, top-performing businesses have prepared themselves as well as possible in the event they lose a key employee.|
Since Harvard studies show interviews alone to be only 14% accurate, you probably do not have top performers in all key positions in your business. The top performers that you do have may not be loyal to you or your business and might leave if an equal or better offer comes along. You might not be looking at your human capital needs strategically and making the necessary adjustments.
|Top-performing businesses have processes to attract and retain top-performing employees. These companies understand that Human Capital Management can make or break a company and therefore review their human capital needs on at least an annual basis. They understand the cost to the company in poorer quality, poorer service and increased costs from poor employee engagement. They work to ensure a culture of trust, positivity, autonomy and fairness along with training, transparency, feedback and recognition to retain their A-level employees.|
You have not developed a strategic 3- to 5-year plan that charts the course of your organization or you have not developed an annual operations plan that supports your strategic goals. Organizations that operate from strategic plans with supporting annual plans have a much greater likelihood of reaching their goals and realizing their company vision.
|Top-performing organizations operate both through 3- to 5-year strategic plans supported by a detailed 1-year operating plan. They take the time to create Strategic Goals, Annual Goals, Strategies and Action Plans for achieving their company vision. They create plans that are right-sized for their type of organization. They review major decisions against their plans and are nimble enough to make adjustments as circumstances change or new opportunities present themselves.|
You do not track your business using financial and operational KPIs or do not review them often enough or only use lagging indicators (financials from your accountant). KPIs allow for businesses and results to be evaluated objectively rather than subjectively. By not managing your business using KPIs you are not able to identify and respond to early warning indicators in your business.
|Top-performing businesses manage their business using financial and operational KPIs. They establish weekly KPI goals and carefully compare actual results against the goals.|
They focus on leading indicators instead of lagging indicators so that they can make adjustments to their business in enough time to positively impact financial results.
You and your partner(s) and/or family members are not in alignment regarding the direction of the business or your succession plan. You may experience regular conflict which is counter-productive to the business and makes your work experience less satisfying than it could be. You likely have not created a succession plan or there is discord regarding your eventual succession.
|Top-performing businesses have established a well-defined shareholders or operations agreement. The partners and/or family members agree on the vision and direction of the business. All parties are comfortable that everyone is contributing to the business at a level that matches their equity position. All parties are in agreement about succession plan and the timing of the succession.|
You have not developed a clear exit strategy and are unsure about the timing of the exit. You may not have structured your business to maximize valuation and may not receive compensation for the sale in line with your expectations. You may be leaving your family or employees unable to run the business effectively in the event of your death or incapacitation.
|Top-performing business owners develop their exit strategy years before they plan to exit. They have done a valuation on their business and have taken significant steps to improve the valuation of their business. They have developed a realistic expectation of what their business is worth to a buyer and are confident they will exit on their own terms. They have put plan documents together to guide their family and employees in the event of their death or incapacitation.|
Your business would suffer significantly and may not be able to survive if not for your daily hands-on involvement. You have not put the leadership team in place, do not delegate enough and have not formally documented your business to be less dependent on you. Your business therefore is not very attractive to a potential acquirer. You live to work rather than work to live.
|Top-performing business owners realize that the more the business is dependent on their individual contributions the less valuable it is to a potential acquirer. They have a second-in-command or a management team that runs the day-to-day operations of the business. They have a high degree of trust in their team and delegate the majority of important operational tasks to them. They have taken the time to document all key process activities in their business. They have specified their work-life balance goals and attained them.|
Your employees are not really clear on what is expected of them and aren’t really sure whether they are meeting expectations or not. They don’t take full accountability for their work results and if terminated would be surprised. They are unclear about how their responsibilities contribute to the success of the business.
|Top-performing businesses have communicated clear expectations for each employee. The employees know how their work supports the company goals. Employees know whether they are succeeding or falling short of expectations. Employees are accountable for their work results and do not make excuses when they fall short. Management consistently communicates with their employees and if they are not performing they would not be surprised if they were terminated.|
You tend to make your business decisions in isolation; or discuss only with employees and/or family members or those who are not business owners (like accountants and attorneys and consultants). Due to the limited input that you receive, you may not always make the best decisions for your business.
|Top-performing business owners have learned how valuable it is to establish an objective, experience-based sounding board for important decisions. They are part of a group of other business owners who understand both their business and their personal vision of success. Because they are not beholden to each other, they provide unbiased and candid feedback on each other’s challenges and opportunities. Because ‘none of us is as smart as all of us’ they regularly make higher quality business decisions.|