by Mike Goossen, CPA, CFO, CEO of Columns 4 Success
A successful business only needs four things in place to succeed:
- A strategic vision
- Sound financial management
- Strong leadership
- Engaged employees
As a business owner, you’re familiar with these concepts and may even have some processes in place. But do you truly have these principles ingrained into your daily business practices? If you’re struggling or just less successful than you want to be, here’s how to recognize which of these strategies you have in place… and where you can improve.
A Strategic Vision
Vision is the driving force the leads every successful business.
It is a clear description and what every business owner, CEO or executive director dreamed their organization would be and do. It’s a vision of what could be or what we want it to be.
It’s what success for your business looks like.
While this might seem obvious, clearly describing this vision is extremely important.
I have business owners come to me and ask for help in growing their business or solving some of their people problems.
As I listen to their concerns and dreams I ask, “What does success look like to you?”
There’s often a long silence on their end and their answers are usually vague:
- “More sales.”
- “Happy employees.”
- “I guess more profits with less effort.”
- And very often they say “I’m not sure.”
Until you have a clear vision of where you want to go, or what you want to achieve, all the effort you might put into growing sales or fixing your staff problems will be futile.
It’s having a clear vision and building a relevant strategy that gets you to where you want to go.
Thus, a strategic vision is taking the vision and putting legs to it. It’s creating the framework and specific processes necessary to achieve it.
The next question you should be asking is “How?”
How do you take your vision and develop the strategy to achieve it?
It’s a very big question. It requires following a step-by-step process. Like a road map, it takes you through an analysis of every aspect of your business. Along the journey you’ll refine your approach or even make big changes to your processes, business model, and possibly your staff.
The road map gives you an orderly process that takes you to a place where you can achieve your vision.
You can’t simply go out and hire a great sales team. It’s great when your sales grow significantly, but what if you can’t sustain that growth because your systems and processes can’t handle the increase. But you also can’t simply improve your production processes without knowing how you’re going to sell the increased output.
If your sales are increasing and you don’t know why, you may add staff but then if sales drop off (and again you don’t know why), you’ve now got additional overhead you can’t afford.
The point is, if you make changes without considering the impact on the organization as a whole, you’re setting yourself and your people up for failure.
Your greatest chance for success is secured by methodically and deliberately developing a strategic plan to fulfill your vision.
It takes work and effort, but the outcome is worth it.
Sound Financial Management
Most people think of financial management from the perspective of personal finances and managing accounts and investments. In business, financial management is similar in that it includes sounds practices like keeping good bookkeeping records and filing tax returns on time. It’s also a deeper strategy of managing and planning for the monetary systems which drive businesses success.
Personal investment advisors are called “financial managers” but in the business world, the CFO – or Chief Financial Officer – is the manager, monitor, and advisor for the business finances.
The CFO focuses on systems to prevent loss from fraud and theft, on cash flow, financial projections, budgets and the relationships between the activities of the operations and the financial results.
CFOs are necessary – whether as a part of the staff or in the form of an outsourced CFO – for any business owner who wants to have confidence in the financial strength of their business.
The solid financial management and advice provided by experienced CFOs will give a business owner or corporate CEOs information and confidence to lead the organization through any challenges of their business.
Once the strategic vision is created, an outsourced CFO can provide the financial structure and systems necessary to fulfill that strategic vision that the business has developed.
Solid financial management includes:
- Procedures and systems that prevent fraud and theft.
- Financial reports clearly state the businesses financial positions.
- Information that gives management confidence to lead.
- A connection to the strategic vision with financial indicators that track and measure success.
- Monitoring of cash flow, a key concern for all businesses.
- Coordination with leaders to set up annual budgets and systems to monitor the budgets.
- A foundation for working with financial institutions and investors when business growth requires additional capital.
The strategic vision will be achieved only with the sound financial principles that financial management provides.
A business can survive without it, but will never reach the level of success that may be possible.
Leadership is key. Not just at the “top,” but leadership on every level. Leaders set the stage and influence the organization’s culture, good or bad.
Leaders are responsible for hiring, firing, building systems, allocating resources, implementing plans, and monitoring results.
And yet, with so much riding on these key people, few businesses proportionally invest in developing their skills.
Only 2-3% of all businesses survive more than 10 years. Strong leadership is crucial to making it to that milestone.
Even if you are leading a business that has been around longer, you can’t relax and rest on your current level of leadership development and expertise. There are no guarantees. Remember Blockbuster? Founded in 1985, they were a successful business for decades. Now they’re gone.
You and your leadership team must be constantly learning, with your eyes up and focused on the horizon.
Leaders have multiple responsibilities but they can be summarized into five roles:
Depending on the responsibilities of the leader, the amount of time spent in each of these roles varies. However, all leaders find themselves in each role at one time or another. If you are seeking to increase the competency of you and your leaders in each of these roles, you’ll contribute to the long-term success of your organization.
Don’t you wish everyone in your organization worked as hard as you do? Or just half as hard as you do.
You treat people well and they know that it’s important to work hard to keep their job. So why is it that so many people in your business seem to do no more than exactly what they were asked to do? And if they’re left unsupervised, they do even less?
When you see behavior like this – or can describe worse – you’re defining employee “dis-engagement.”
In June 2017, the Gallup organization issue a report titled “The New American Workforce.” It included the answers to questions about work attitudes from over 195,000 US employees across the country. The results were a bit troubling and clearly indicated that the old methods of managing people many business owners rely on no longer work.
The very first sentence of the report, from the CEO of Gallup states: “The old ways – annual reviews, forced rankings, outdated competencies – no longer achieve the intended results.”
The overall point of the report is that we can no longer achieve the level of employee engagement we need by doing the same things we have always done.
Two of the most compelling statistics from the report are:
- Only 33% of the employees surveyed indicated they were fully engaged at work.
- Only 21% agreed that their performance was being managed in a way that motivated them to do outstanding work.
These two results along are enough to explain why so many of us are frustrated with the lack of effort we get from our staff.
Reaching a high level of employee engagement is a challenge and it isn’t easy, but there are a few things you can do to get started:
- Examine the culture of your organization. Do you have a culture of trust or mistrust? A culture of mutual trust is an absolute must.
- Do you have a clear vision, mission and purpose beyond profits? The new American Workforce wants to work somewhere that meets their need to “make a difference.”
- It is important to hire the right person who will fit your culture. Hiring the right person, the first time, is very important. It’s important to create a strategic hiring process that will improve your hiring results.
An engaged staff, from the very newest employee to the highest level (you) is critical to a successful business. You must invest in your employees and determine the path necessary to reach the level of engagement you need.
Are you confident that you have these four principles of business success in place?
A strategic vision, sound financial management, strong leadership and engaged employees are the foundation of the long-term success of your business.
Columns 4 Success provides the road map, structure and services to guide you through the process. We do not consult; we partner with you to help you reach and maintain your goals.
Call us for a free 90-minute review to see how we can help. This could be the first hour towards the journey of success you’ve always dreamed of achieving.
Call (559) 681-6559.
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