Sharpening your business skills

Barry Freeman, principal of Quantify Corporation

There I was, in the garage, trying to use a chisel which was as blunt as the hammer I was hitting it with. I was getting nowhere fast. The wood was western red cedar, a very soft wood, which should have been dead easy to chisel. Obviously the solution was to sharpen the chisel, which I did.

The reason I’m telling you this is that while I was using the grindstone to do the sharpening, I started to think about our business and to connect that thinking with the conditions we’re about to face in the business world. If not the “R” word, then something approaching it will happen progressively to us over the next year or so.

SNAP! The next thought I had was that we need to sharpen our business skills in order to be able to make good business now and also when things get worse than they are today.

We’ve already seen a number of things happening here in Australia with the recent severe downturn in the stockmarket, with IT companies being taken over, or even worse, some going broke. Why has this happened?

In the good times we push the envelope of our business model to the hilt…make hay while the sun shines, so to speak. We often don’t attend to the basics, partly because we’re running so hard and it’s so exciting that we lose sight of many of the fundamental tools we use normally to ensure the business is on track and working correctly and safely.

So, maybe it’s about time we got back to basics and started looking at our “business tools” to make sure they are as sharp as they can be and that we are using them the way they are meant to be used.

What are the business tools we should be sharpening?
Well, I think that some of them would definitely be….

The Business Plan tool

• Have you got one?
• How relevant is it for now and for the conditions to come?
• How is the business performing against the plan?
• Are you following it and adjusting to suit the conditions?

The Meeting tool

• How often do you run the senior management team meeting?
• When you do, do you review minutes and actions to ensure everyone is doing what they committed to do?
• How well are these meetings run? Chairman, review,discussion, minutes

The People tool

• How well are your staff performing?
• How happy are they in their workplace?
• What development plans do you have in place for them?
• How good are their job descriptions if they have them?
• How well do you know and manage your Generation Y staff?

The Sales Pipeline tool

• Do you have one?
•How good is it in telling you what opportunities are ahead?
• Are there enough opportunities in the pipeline to achieve the business plan numbers?
• What actions are you taking to get new customers?
• How are your existing customers growing in their business with you?
• What actions have you got in place to lock in some of your long-term contacts?
• How good are the various members of the sales and management team at forecasting their business accurately?.....because this can kill you!

The Cash Flow Projection System tool

• Have you got a system to manage and predict cash flow?
• If you have, how good is it? Does it give you what you need?
• How often do you look at it?
• What is your Days Sales Outstanding (DSO)?
• How could it be improved?
• What about accounts payable?
• Have you got the terms agreed and can you pay on time?

The Activity tool

• What methods do you use to keep an eye on activity and work rate levels?
• How often do you talk “one on one” with your team members?
• How well organised are the people in your team?

The Marketing tool

• Do you have a plan and a marketing budget?
• Is it working effectively?
• What could you do to adjust it to make it more effective?
• Are you known as an expert in something?
• How do you innovate and manage your ideas?
• Do you ever get tempted to cut your spend on marketing?
• Don’t do it? It is the lifeblood of your business leads.

The Training tool

• How sharp are your people?
• Where could they use some improvement?
• What could you do to fill their training gaps?

The Financial Management tool

• What financial ratios do you use to understand the state of your business?
• What ratios should you have to make sure things are OK?
• What values should they have for normal operation of your business?
• How often do you look at them?
• How often should you look at them?

Looking at all the tools above, there are quite a few that may need sharpening in your organisation. This, then, is a beginning. We’re going to present a series of articles on each business tool and study them in depth, to see how they may need to be sharpened and how they could be used more effectively in making sure your business skills are ready for the job the near future presents to us.

Since I sharpened that chisel, not only was it easier and more effective in helping me to do the work I was doing with it, but I was really enjoying using the tool and the job itself became a pleasure.

If you need to sharpen your business skills, contact Barry at barry.freeman@quantify.com.au. For more information on Quantify Corporation go to www.quantify.com.au.