4
THE CORE ELEMENTS
TO BUSINESS SUCCESS
CORE #1 / GUIDING THE BUSINESS
BUILDING A MEASUREMENT SYSTEM This is the second of three articles on CORE 1: GUIDING THE BUSINESS. Last month we covered creating a purpose, this month’s focus is building a Measurement System that tracks progress, defines results, and makes sense of accounting statements. So let’s start our journey at the beginning - MONEY! What are the causes of great financial performance? Today most of the measurement systems we implement follow a formula.
C+P+T=$
Customers demanding Production built by Talent creates Financial Performance
CUSTOMERS Measurements of how the customer perceives the quality of products and services you offer, the experience of doing business with you, and treatment they receive after they submitted a payment. • Marketing measures: Frequency of contact, open rate, and the balance of communications. • Sales measures: Close ratio, time to close, and sales price. • Service measures: Delivery on promise, recovery from failure, and front-line authority.
PROCESSES Measurements of how you build and deliver the products and services the customer purchased. Consider this: Margins are 80% scheduling, 15% job efficiency and 5% control of waste. • Scheduling measures: Overall project/job scheduling, scheduling elements within projects/jobs, and the sequencing of elements within projects/elements. • Efficiency measures: Actual time worked vs. available time, finished jobs/tasks, and work performed outside of change orders. • Waste measures: Scrapped materials (thrown away), returned tasks (fixed), and redone tasks (done over).
WILLIAM EASTMAN GreenMark Consulting Group
TALENT Measurements of how you get people to act like owners and work harder than their paychecks. Consider this: Standards are set at about 40% of a person’s ability. How many of your people are just cruising? • Leadership measures (includes management): Presence on the job site and in-touch with the work, their group’s contribution to the business, and how they represent the company. • Teamwork measures: Members commitment to the group, the group’s unofficial rules about working and supporting the work of other members, and self-management. • Skill Mastery measures: How well a person fits the job, how fast are they becoming competent, and how are they using technology to work on higher impact tasks.
FINANCIAL PERFORMANCE Measurements that differ from how the bank or your accountant looks at the business. There is nothing wrong with their approach. However, it is smart for the owner to use the lens of an investor – which they are. • Are you a good investment? What does an investor want to know – revenue, earnings, and net investment back in the business? (We will cover this in greater detail in later articles when we cover creating a financial legacy for your family.) If you want to build a measurement system that tracks performance and results, join us on the Ohio Landscape Association Group on Facebook and access tools to build an effective measurement system.
TO VISIT THE CLOSED FACEBOOK GROUP MENTIONED IN THIS ARTICLE GO TO WWW.FACEBOOK.COM/GROUPS/283132448827812