Four Decisions for Growth â€“ Part III
By: Dave Baney
In business, â€œGazellesâ€ are growth firms, they are job generators that will do the most to get our national economy back on track and the leaders of these growth firms continue to grow their businesses despite uncertain times. Gazelles by definition are those organizations that grow by 20% or more each year for at least 5 years in a row. In order to be a gazelle, you must get these four decisions right: people, strategy, execution & cash. At any given time the challenges in one of these four areas may over shadow the rest, therefore youâ€™re looking to choose which one of the four to focus on next.
Over the next four weeks we will focus on each of these areas, one per week. This week we will talk aboutâ€¦
EXECUTION: It’s the third decision and it’s all about hitting and exceeding company targets and profit goals. Finding a way to consistently execute your strategy is the key to growing the value of your business, no matter what challenges youâ€™re facing.
If your organization is like most, you face a constant onslaught of changes, challenges and unexpected crises. Handling these on a day-to-day basis while focusing on what tomorrow may bring is a daunting task.
The place execution issues show up is in profit and time. If youâ€™re growing and not making enough money you have an execution issue. Weâ€™ve seen firms double and triple their revenue but have not seen their profitability grow, sometimes even drop and itâ€™s usually because of some sloppiness in the execution.
An indication of execution is pure hours spent delivering products or services. So if you see that your company has to rely on the heroics of a few people putting in incredible hours just to keep the wheels from falling off the organization, there are probably some execution opportunities within your business.
Take a look at what the execution habits of your organization are and tighten them up. Make sure you have good communication and that your people understand what theyâ€™re being held accountable for and focus on accomplishing those things.
Here is a good practice idea for your folks to spend a few minutes on at the end of each day:
- Write down their top priorities for the next day. What are the top 1, 2, 3, and 4â€¦tasks they need to accomplish?
- The next day focus on them and get that list completed.
- At the end of the day write a new list for tomorrow.
Another simple thing I would consider doing is:
Take the last five years P&Lâ€™s and set up a line by line comparison, assign ownership of every line to somebody on the staff.
Give them the simple goal to look at this P&L line itemâ€¦Letâ€™s says our cost of goods sold from 3 years ago. We were at 32%; Iâ€™d like you to come in at, at least that number. And so if you assign responsibility for each line of the P&L and have folks focused on achieving a number that weâ€™ve previously achieved you might be surprised at the benefit because rarely have you achieved your best year on each line item of the P&L all in one year.
So begin to think about how can we out execute ourselves in the coming weeks, months, & years. And next week weâ€™re going to talk about the impact that has on cash. Cash is our fourth decision.
Dave Baney brings over 30 years of Fortune 500 management and leadership experience to growing businesses nationwide through 55 Questions’ tools and processes. Known for crisp execution, marketing insight and thoughtful direction, he is now a trusted advisor for CEOs. Contact Dave directly: firstname.lastname@example.org