Are you ready for the opportunities on the horizon?

By Elizabeth Pearce, EJ Pearce Limited

COVID has brought many new challenges, opportunities, and the chance to look at life slightly differently.

Published in Suffolk Director Magazine, Summer 2021

Director’s Toolbox

We better understand how life can throw us a curve ball, and for those running businesses, it has made us look inward into our organisation, to find out how we can streamline our operations and cut costs.

Undoubtedly, for most, the pandemic made us all stronger and more resilient, but have we really examined or challenged how we do things within our businesses? Many of us have built our companies from nothing, but most of us fail to check that the operational controls are working properly. We work on the basis that we have taught our team the “how to” and so everything should be running at its best; the danger is that we end up making decisions based on “assumptions”.

Very positive things have come out of this pandemic and new sectors and opportunities continue to present themselves; we need to be agile to be able to maximise these. Yet how can we challenge ourselves to better understand how agile, and how ready we are, to take advantage of the opportunities on the horizon?

Here is a 10-point checklist for you to use to understand where you and your business is:

1. You as a Director / Leader

  • Do you find it hard to let go of operational control? This burns you out and doesn’t allow staff to grow, develop and take ownership of tasks. Therefore you risk losing them.
  • Do you trust no-one and keep information to yourself? If so, this means the team don’t really understand and therefore can’t contribute to the business.
  • Are you decisive? if not the team will be confused as to where the business is going, what is important and a priority.
  • Are you constantly frustrated with underperforming staff? This is often due to their lack of training and clear direction, or simply that their skillset does not fit the role they are being asked to fulfil.
  • Do you fully understand the operational performance in the business, or are you making assumptions that everything is being done in the best possible way?

2. Your customer service

  • How can you be sure that your team are delivering excellent customer service? Everybody’s perception is different and without well defined processes and sound training, people will work to their own levels.
  • Are sales recorded accurately and are changes to customer requirements being communicated? The best way to check is to look at lost business and the number of credit notes raised.
  • How current is your pricing strategy and how often are your margins reviewed? Are there formal processes to ensure that all staff understand how to quote accurately?
  • Are you measuring quote to order conversion ratios and looking at why some quotes fail, then using this information to implement improvements?
  • Are your customer complaints formally handled and investigated to identify why things went wrong?

3. Is purchasing well controlled?

  • Do you have a good knowledge of all the suppliers your business uses? Not controlling your suppliers allows poor quality products and services to become present in your business.
  • Are purchasing controls formally in place defining who can approve suppliers, place orders, issue purchase and credit notes?
  • Is spend control clear within the business? Defining who can purchase to what level and defined sign off helps with your cashflow.

4. How effective is your delivery?

  • What do your customers think of you, do you get repeat business? Or are they constantly complaining?
  • Do you check your operational controls? Focus tends to be on sales and financial controls, but there is good potential for cost savings from investigating how your operational control works and implementing processes that decrease duplication and increase cohesiveness and communication.
  • Does your sales team and production / service delivery teams work in isolation from each other?

5. Financial controls

  • Do you understand the importance of cashflow management as well as profitability of the business, and through the balance sheet, the overall value of the company?
  • Have you considered different scenarios of what you might be doing, and do you understand the effect of any one strategy on both cashflow and profitability?
  • Do you have a method of monitoring performance on both a monthly and quarterly basis? This helps to keep the business on track and enables actions to be quickly taken when things are not working.

6. Is quality built in?

The principles of quality management are quite simple – “getting it right first time”. But how do you know that your team are adhering to these principles? Do you measure how much re-work or additional work gets done as a result of internally generated issues? And do you take the necessary follow up action to ensure that the root cause is addressed?

Things go wrong for a number of reasons but can often be easily remedied. Main reasons align around a lack of defined process, clarity of communication channels or quality training so the team are not absolutely clear on what to do in certain parts of the overall process.

7. How strong is my team and the culture?

This is such a critical part of a sound agile business, as the team need to be able to respond collectively and quickly to change, helping to develop and deliver an evolving strategy.

This requires key attributes, so does your team have:

  • a passion for your business and willingness to help make things happen?
  • good communication skills across the team and with you?
  • senior managers who understand how other parts of the business function aligned to their responsibilities?
  • the skills and training for the tasks they are being asked to perform?
  • a non-blame culture where they feel able to challenge when they think something is not right?
  • individuals who understand where they “fit” into the organisation?
  • clear lines of responsibilities and accountability?

8. Decision making

We all understand the need to measure our financial performance but how to define what else we need to measure? What do you measure in the business, what do you do with the information and is it of value?

Performance measurement is driven by your key objectives. So if you have set an objective to improve customer response times, then that is what you need to measure and react to. Too many businesses measure for the sake of it and end up with considerable volumes of data which consequently never gets looked at or acted upon.

When deciding to measure, there are some simple rules – is it easily measurable? does it tell us what we want to know?

9. Setting objectives

Have you set objectives for this year and are they realistic, achievable, and measurable? It is too easy when running a business to lose sight of these; the day-to-day operational activity gets in the way and before you know it the year has passed, and little has been achieved on an objective you had identified as being important for the future.

This is easy to change by just investing a little more time at the beginning of the process. Once you have agreed your objective, establish a project plan outlining what is to be done, who is doing which bits and when it is to be completed by. And then track it.

Performance should be reviewed quarterly to realign the schedule and take actions to keep the objective delivery on track.

10. Looking outward

Do you monitor the world around you and consider the potential risk to your business? If you look to the horizon gazers of this world, there will have been an indication that a pandemic would happen.

Right up to the start of 2020, running business continuity scenarios would have been low down on many of our agendas, but now we should take the opportunity to carry out regular risk assessments, putting plans in place to ensure you are best placed to protect yourself against interruptions to business trading.

If nothing else the pandemic has taught us that we have to look at the world differently and take more seriously the potential risk to our businesses. What’s next; climate change, further pandemics, extreme weather situations? Whatever the next curve ball thrown at us, will you be sufficiently agile and ready to take advantage of the opportunities it might bring?

Photo of Elizabeth taken by Paul Nixon Photography

Elizabeth Pearce is an experienced Operations Director and was instrumental in growing an international manufacturing business from £200K to a £5m turnover. As Director at EJ Pearce, she now helps organisations to challenge how they operate through Leadership Risk Assessment with a clear output helping drive identified change through the business. T: 07365 517481

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