Aligning Business Performance
Welcome Founders!
This is part 3 in our “The importance of focussing your business” series, part 1 being an overview and part 2 was on Documenting the Founder Goal. Today, we’re looking at Business Performance.
In order to effectively focus your business performance, you’ll need to consider the following two components:
1) Understanding your business
2) Building business capability
Let’s get started!
Understanding your business
Before we dive into understanding your business it’s important to remember that we’re trying to understand what we need to do for the business to achieve your documented Founder Goal. So, with that in mind, the key areas to focus on are:
§ What is your business success (key success factors) based on? Is it simply price? Novel innovation? Your expertise?
§ What do your customers need? You know that customers think they know what they want, but do you know what they need?
§ How does the industry work? Is it mainly relationship based (all industries are helped by relationships, but in some they are essential to being able to break in and maintain the business)
§ What are your competitors going to do? How are you going to maintain your market share?
§ What legislation or compliance changes apply or look likely? Because there’s nothing like a change in legislation to open opportunities or kill your business.
§ Where are you getting the cash? What do your investors/shareholders want and is that aligned with your Goal?
§ What capabilities do you need to be successful? Depending on your goal, you probably aren’t going to be able to do it by yourself!
This isn’t an exhaustive list – your business and your Goal will affect what you need to understand. Before we go on – couple of key tips.
Probably not the tips you were expecting and probably not ones you wanted to hear. However, these are the two things that cause the most issues down the track!
Building Business Capability
Now that you have your Founder Goal (documented!) and have an understanding of your business, it’s time to build it! Let’s look at the capabilities that a small business needs:
Note that the above is for a small business so it’s simpler than other capability matrixes you find. It’s reasonably self explanatory, but there are two items I wanted to call out:
§ Vision / Mission: The vision/mission is the public facing version of the Founder Goal. It needs to contain the key elements to ensure that it’s clear to all staff what they are focussed on. But some elements don’t need to be included, for example if the business is going to be sold, that’s not necessary to include (because the business will continue after the sale).
§ Governance: Somewhat controversial, depending on your definition of governance. From our, small business, perspective governance means having processes and systems in place that enable us to achieve our goal, while avoiding threats and roadblocks. Governance isn’t about massive processes and interminable bureaucracy it’s about ensuring business can continue without you having to do everything.
Ok, that’s it for now, what do you think? Please reach out if you have any comments or questions, we’d love to hear from you.
Next time, the topic everyone wants to know the answer to – Cash!
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