Do you know every day the profitability of what you do? Are you sometimes unsure whether your product is profitable? Would you like to have a control panel showing you what is happening in your company to help you make the right decisions? We drive a car and regularly check the control panel, yet we manage a company without paying attention to any indicator that shows us what is really happening. So are you driving your company with a blindfold on?
After having worked in mentoring programs with many companies from different sectors and countries, I find that, in general, they do not have a control panel or dashboard, and if they do, they make poor use of them.
When running a company, you should have some basic indicators that can be analyzed on a daily, weekly and monthly basis, depending on the case. Managing by intuition and without reliable data can lead you far from reality and cause you to take unnecessary risks and experience a loss of profitability and competitiveness.
Therefore, you should define these parameters—which must be simple and very practical—to make the next step, which is reading and diagnosing the situation.
Once this diagnosis has been made, the next step, which in very few cases people know how to put into practice, is to implement an immediate action plan to reverse an undesired situation.
For this, it is necessary to train in the following techniques to help improve the control of the business and make it more modern, predictable and productive.
• Have the best enterprise resource planning (ERP) possible. This likely depends on which sector your company operates in. This can make it possible to digitize processes and obtain the best possible information for decision-making.
• Analyze the level or percentage of use of the different applications and options of the ERP. In my experience, many program options are not used and with better training and research, you could get much more benefit from the ERP, thus achieving greater automation of processes and improved productivity.
• Define the most important KPIs or basic indicators based on previously defined standards. Review them with the members of the team so they all have first-hand, relevant information for analysis. In this way, you can make decisions based on objective data.
• Review daily. If the business has recurring weekly and monthly sales, diagnose what is happening and see possible deviations.
• Train managers to make decisions in the face of possible deviations. A reading accompanied by a lament and sometimes an excuse is not enough. Managers should propose alternatives and an immediate action plan to reverse undesired results. There is a tendency to postpone decisions, but time will always work against you. This could be the most difficult task and where I often find the greatest need for management training.
• Have a CRM according to the needs of your company and sector. This can give you basic information on current and possible future customers to make your database profitable and increase sales. At the same time, devise a plan of action to increase the number of customers by properly monitoring potential leads.
By putting this in place, you can better manage from a distance. You can better see deviations and give instructions to improve the evolution of your business.
You can’t run a company with your eyes closed.
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José Luis González, Forbes Coaches Council Member
