On average, I spend at least one third of my time each week on the strategic or big-picture areas of my business. Most weeks, I do not spend my time putting out fires and doing work that an employee at lower-level employee could do just as well.
You allocate sufficient time to work ON your business as well as IN your business. Most of your time is spent on strategic areas of your business. Your business is not overly dependent on your individual contributions to the company.
You may be subject to the tyranny of the urgent. You may spend your time primarily working on tasks even though they could be easily delegated, meaning you don't spend enough time on the strategic areas of your business.
Top-performing company leaders spend the majority of their time working ON their business rather than IN their business. They delegate most tactical activities and fire-fighting activities to their employees and concentrate on activities that have the greatest impact on their business.
We have written a company vision statement that every employee knows. Our employees are working together to help the company achieve this vision.
You have a well-defined vision for your business. Your employees understand it and are aligned with you on working towards your vision.
You have either not clearly defined your company vision or have not aligned your employees to work towards that vision. Without a clear vision of where your company is going, how are you going to know when you've reached it, and how are your employees going to help you get there?
Top-performing business owners start with defining their Personal Vision of success. They then write a Company Vision that aligns with their Personal Vision. Their employees understand the Company Vision and are working together to achieve the vision.
We measure the engagement level of our employees, and are aware that most are engaged, committed and willing to go above and beyond for the benefit of the company.
You regularly measure employee engagement and realise how important it is to have employees highly engaged in your business. You have created an environment where employees display engaged behaviours.
You may not realise that your employees’ engagement is the most important factor to the success of your organisation. Or you don't know what steps to take to create a great culture and an engaged workforce.
Top-performing companies realise that their employees are their most important asset. They develop career paths for them and assess their engagement and performance regularly. All employees have well-defined job responsibilities and know how their work contributes to the success of the company. The company communicates regularly with employees, has a transparent culture and encourages intrinsic motivation though the management team.
We have achieved consistent and healthy year-on-year growth in turnover.
You run a predictable business where you are able to successfully forecast growth objectives in your business and consistently meet your revenue goals each year.
Your sales revenue is inconsistent. Some years you grow, some years it's flat and others years, it's declining. You cannot make good business decisions without a predictable growth model. Potential acquirers find revenue inconsistency unattractive.
Top-performing businesses are good at forecasting revenue growth targets and have the execution consistency to meet or exceed their goals year-on-year. They have a diverse customer base, a proven sales model and they run their sales department from a sales plan.
We have developed a strong brand for our business that our customers understand and identify with. Customer retention measurements suggest they buy more from us and stay loyal to us because of the brand.
You have developed a strong brand that allows your customers to connect with the purpose of your business; more than just the product or service you offer. Your cost of new customer acquisition is lower and your retention rate of customers is higher than competitors in your industry.
You do not have a strong brand. Strong brands: attract customers at a cheaper cost, retain them longer, and allow you to charge more for your product or service. Your customers may leave when they find a cheaper alternative.
Top-performing businesses have developed a brand that means something to their marketplace. Prospects are attracted to their brand and refer others to their product or service. Top-performing businesses seek to reinforce their brand through every decision and action that they make.
Our customers know and value the benefits our products or services provide. They understand how our offering is different from and superior to competitive offerings.
You have quantifiable differentiation of your product or service offering over competitive offerings. Your customers are aware of and understand the value of this differentiation over other alternatives.
Your product or service does not have a significant measurable point of differentiation from your competitors' offerings. Your customers and prospects do not understand the value your offering gives them vs. the competition. They may leave when they find a cheaper alternative.
Top-performing brands have identified measurable benefits that differentiates their products or services. These points of differentiation are understood by their customers and prospects. Their differentiation is substantial and is based on more than just “good customer service”. Customers place high value on these points of differentiation.
Our profits exceed industry averages and we do not have any cash flow challenges. We are financially prepared in the event of an economic downturn.
You place a premium on generating healthy profits, maintaining solid cash flow and you have a demonstrated track record of profitability that is above average for your industry. You are fully prepared to endure a significant downturn in your business or industry.
You don't have a track record of consistently generating healthy profits and cash flow or you don't know what the profit averages are for your industry. You may be focused on turnover alone and/or have not identified operational efficiencies that lead to healthy profits. Only businesses that demonstrate consistent and healthy profitability will survive. You may be generating profit but are taking too much out of the business making it vulnerable to future downturns.
Top-performing businesses forecast profits, cash flow and budget expenses to attain the budgeted profit and cash flow. They review their financial situation often and take action to generate consistent profit when necessary. They have enough retained earnings and cash to allow them to operate the business during a downturn and do not drain the company of cash. They also generate sufficient profit to invest back into the business.
We routinely measure our customer service levels. We use this data to improve the performance of our business. Our employees consistently provide exceptional customer service and our customers feel valued.
You place a high value on your customers and your employees consistently provide them with a high degree of service. You measure your customer service levels and your customers feel valued and do not leave due to perceived indifference.
You may not know what your customers think about your service. You take your customers for granted or you have not created the culture and training required for your employees to provide great service. The majority of customers leave, not due to your product, but because of perceived indifference to them.
Top-performing businesses place a high value on their customers and their employees. Their employees are engaged, aware of their role as brand ambassadors and provide exceptional service in all interactions with customers. They provide a culture and the necessary training to achieve high service standards. They consistently measure service levels, understand why their customers leave them and monitor the engagement level of their employees.
Our key business processes are well-documented and our employees would be able to continue to function at a high level if one or more key employees left.
You realise the importance of formalising your processes so that you are not completely depending on the skills and knowledge of a few key employees. If you do lose one or several key employees, your business would not decline significantly and you would not have to change your role in your business.
Your business is dependent on the skills and knowledge of one or more key employees. If they leave your business, you are likely to lose customers, experience delays, suffer service issues. It would require you to spend more time working in your business as a direct result
Top-performing businesses have taken the time to formally document all key processes. They have also cross-trained employees in most areas of their business. Whilst it is not easy for any business to lose a key employee, top-performing businesses have prepared themselves as best they can should this happen.
We have a formal recruitment process that is intended to identify and secure top talent. We are constantly working to upgrade our talent and are not reluctant to dismiss those who perform below expectations or no longer fit the company vision. We have a culture that nurtures great employees.
You know how to manage your human capital correctly. You utilise both an interview and assessments to recruit employees. You remove from the business those who are a recruitment mistake and those who do not fit the company strategically regardless how much they are liked. You also know how to keep your current “A players” engaged.
You probably don't have top performers in all key positions in your business. The top performers that you do have may not be loyal to you or your business and might leave if an equal or better offer comes along. You might not be looking at your business' skills gap strategically and making the necessary adjustments.
Top-performing businesses have processes to attract and retain top-performing employees. These companies understand that having the right employees can make or break a company and therefore review their recruitment needs on, at least, an annual basis. They understand the cost to the company in poorer quality, poorer service and increased costs from poor employee engagement. They work to ensure a culture of trust, positivity, autonomy and fairness along with training, transparency, feedback and recognition to retain their top employees.
Our business operates from an annual operational and strategic plan and all business activities are aligned with these plans.
You are running your business correctly using your strategic 3 to 5-year plan to guide you in the development of your annual operations plan. Your organisation is primarily working on annual goals, supported by strategies and actions in your annual plan that are aligned with your strategic plan.
You have not developed a strategic 3 to 5 year plan that charts the course of your organisation, or you have not developed an annual operations plan that supports your strategic goals. Organisations that operate from strategic plans with supporting annual plans have a much greater likelihood of reaching their goals and realising their company vision.
Top-performing organisations operate both through 3 to 5 year strategic plans supported by a detailed 12 month operating plan. They take the time to create Strategic Goals, Annual Goals, Strategies and Action Plans for achieving their company vision. They create plans that are suitable for their type of organisation. They review major decisions against their plans and are nimble enough to make adjustments as circumstances change or new opportunities present themselves.
We manage our business using Key Performance Indicators (KPIs) that give us an early indication of future financial performance. We review and track our KPIs on a weekly basis.
You have identified financial and operational KPIs that are used to measure likelihood of achieving your performance goals. You establish KPI goals and manage your business based on measurement of actual KPIs toward those goals. You manage your business using leading rather than lagging indicators.
You do not track your business using financial and operational KPIs or do not review them often enough or only use lagging indicators (eg financials from your accountant). KPIs allow for businesses and results to be evaluated objectively rather than subjectively. If you do not manage your business using KPIs, you are not able to identify warning signs in your business and respond to them accordingly.
Top-performing businesses manage their business using financial and operational KPIs. They establish weekly KPI goals and carefully compare actual results against the goals. They focus on leading indicators instead of lagging indicators so that they can make adjustments to their business in enough time to positively impact financial results.
My partners and family members that work in the business are fully aligned on the direction of the business and have no significant conflict.
You have a well-documented shareholders’ agreement. You and your partner(s) and/or family members are fully aligned on the direction of the business, including the strategy and timing of your eventual exit.
You and your partner(s) and/or family members are not in alignment regarding the direction of the business or your succession plan. You may experience regular conflict which is counter-productive to the business and makes running your business less satisfying than it could be. It's likely you have not created a succession plan or there is discord regarding your eventual succession.
Top-performing businesses have established a well-defined shareholders or operations agreement. The partners and/or family members agree on the vision and direction of the business. All parties are comfortable that everyone is contributing to the business at a level that matches their equity position. All parties are in agreement about a succession plan and the timing of the succession.
I know what my exit strategy from the business is and I’m confident I will exit successfully. In the event of my death or incapacitation, I have prepared a guiding document which expresses my wishes for the continuation or sale of my business.
You have a clear exit strategy including the timing expectations of your exit. You are confident that you will receive compensation for the exit in line with what you believe the business is worth. In the event of your death or incapacitation, you have left your company in a position where key employees and loved ones know how to move forward.
You have not developed a clear exit strategy and are unsure about the timing of your exit. You may not have structured your business to maximise valuation and may not receive the sale value that is in line with your expectations. You may be leaving your family or employees unable to run the business effectively in the event of your death or incapacitation.
Top-performing business owners develop their exit strategy years before they plan to exit. They have done a valuation on their business and have taken significant steps to improve the value of their business. They have developed a realistic expectation of what their business is worth to a buyer and are confident they will exit on their own terms. They have put together plan documents to guide their family and employees in the event of their death or incapacitation.
I have reached my ideal work-life balance or have a specific plan for how I am going to achieve it.
You realise that the more the business is dependent on its owner, the less it is worth to a potential acquirer. You have taken steps in your business to bring in the right staff, to delegate and to document the processes to minimise the dependence on you. You work to live rather than live to work.
Currently, your business would suffer significantly if you were not heavily involved day-to-day. You have not put the leadership team in place, do not delegate enough and have not formally documented ways in which your business can be less dependent on you. Your business therefore is not very attractive to a potential acquirer. You live to work rather than work to live.
Top-performing business owners realise that the more the business is dependent on their individual contributions, the less valuable it is to a potential acquirer. They have a second-in-command or a management team that runs the day-to-day operations of the business. They have a high degree of trust in their team and delegate the majority of important operational tasks to them. They have taken the time to document all key process activities in their business. They have specified their work-life balance goals and attained them.
I have an effective business owner sounding board that I utilise when making important business decisions.
You realise people who currently run their own businesses are going to give you better advice than your accountant, solicitor or even a consultant you hire. you recognise that those who are walking in your shoes may change your perspective and even if they don't, you are more secure that you are making the right decisions because you've discussed it with others who have 'been there and done that'.
You tend to make your business decisions in isolation; or discuss only with employees and/or family members or those who are not business owners (like accountants and attorneys and consultants). due to the limited input that you receive, you may not always make the best decisions for your business.
Top-performing business owners have learnt how valuable it is to establish an objective, experience-based sounding board for important decisions. they are parting of a group of other business owners who understand both their business and their personal vision of success. because they are not beholden to each other, they provide unbiased and candid feedback on each other's challenges and opportunities. because 'none of us is as smart as all of us' they regularly make higher quality business decisions.
Employees are given written expectations, are committed to and accountable for their results and know how their responsibilities contribute to the overall objectives and performance of the business.
Your employees all have written job descriptions and key accountabilities. They know exactly what is expected of them and are clear as to whether they are meeting expectations. They own the outcomes of their positions and take responsibility when something goes wrong.
Your employees are not really clear on what is expected of them and aren’t really sure whether they are meeting expectations or not. They don’t take full accountability for their results and if dismissed, they would possibly be surprised. They are unclear about how their responsibilities contribute to the success of the business.
Top-performing businesses have communicated clear expectations for each employee. The employees know how their work supports the company goals. Employees know whether they are succeeding or falling short of expectations. Employees are accountable for their results and do not make excuses when they fall short. Management consistently communicates with their employees and if they are not performing, they would not be surprised if they were dismissed.