The 7 stages of working ON the business

Through our observation and studies, we have identified 7 stages of evolution that an organization goes through when it comes to working ON the business.

These stages are not definitive many organizations show tendencies to mix components of each stage yet the successfuls master each stage before progressing in an effective manner to the next.

There are many conditions that determine the velocity of the evolution but in the main the key variables that create either constrains or rapid progress include

  • Leadership
  • Culture
  • Money

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What is critical to remember is that none of these stages become less important. Organizations that have mastered stage 7 are just as vigilant in their attention to stage 1 to 6.

Each stage is described below

Stage 1. Process and efficiency

This stage focuses on reducing the work friction. Including

  • Reducing the need to reinvent the wheel each time something must be done.
  • Removing the risk of error
  • Eliminating duplication and unnecessary cost
  • Delivering improved productivity

Stage 2 Creating customer value

Here the organization develops

  • Its USP (Unique selling proposition)
  • Defines the target customer
  • Organizes its product and service in sync with the value proposition
  • Delivers the collateral and content that is appropriate to the target customer in a more formal way

Stage 3 Priority and goal setting

During this phase, the focus is driven between the distinction of urgent and important.

Bothe the urgent and important are addressed in an organized way. Delivering things to be done with true accountability and the necessary deadlines. The follow up process becomes more stringent

Stage 4 Getting to know the numbers

The business starts to question areas like where are we making or losing money, what customers products or services are more profitable, do we have the right cost structure, where should we invest our next available $ and so on.

Stage 5 Strategic planning                           

Strategic planning means different things to different people. This phase is identified when the business sees the need to move to the next level, which could be related to thinking about expansion be that location or product and service expansion or even acquisition.

Strategic planning is usually earmarked by a certain level of confidence that the business has the right process, value proposition that is delivering the required growth and the financials are looking acceptable.

Stage 6 Developing strategic scorecards and measures

This stage is recognized by the acknowledgement that the senior managers do not have all the facts at their fingertips. They are one step removed from the detail day to day. The need to know that the business is following the strategic direction becomes important.

Stage 7 Running the business by the numbers

The numbers are more literal here. Managers are focused with the management operating system delivering the expectation and tools that are needed to run the business

 

Here are the questions that may help in determining your progress.

  1. Leadership
    1. As the leader are you fully committed to working on your business
    2. Do you have scheduled meeting dedicated to working on the business
    3. Are these meetings religiously maintained?
    4. Do you feel you are often in firefighting mode?
    5. Do you feel that you’re working on the business meeting are helping or are time wasting?
    6. Do you have an effective task list that is given to your employees?
    7. Do you make people accountable for each task that is to be delivered?
    8. Do these tasks have a deadline
  1. Culture
  1. Do your employees love or hate the working on the business meetings
  2. Do your employees complete their tasks given during these meetings
  3. Are your employee’s vocal and challenging at these meetings?
  4. Do the meeting often focus on the now problem
  1. Process and efficiency
  1. Are your processes clearly defined?
  2. Are your processes well known?
  3. When a new employee is onboarded do you have a way to explain the processes that are deployed within the business
  4. Do you have the controls in place that tell you when a process is broken or not adhered to?
  1. Creating customer value
  1. How do you attain customer feedback? Do you provide a simple but effective customer survey?
  2. The degree of customer value that you provide is measured by the improvement of gross profit margin as a % of revenue. Is your gross profit % improving?
  3. Do you measure repeat purchases or purchase frequency where applicable?
  1. Getting to know your numbers
    1. Do your employees understand what your numbers are telling them?
    2. What numbers do you share / not share?
  1. Strategic planning
    1. Are you starting to direct your business in those areas that you out perform your competitors?
    2. Do you document and follow through on your strategic direction?
  1. Developing strategic scorecards and measures
    1. Do you have weekly scorecards that inform you of your business progress?
    2. Do you act on the information provided by these scorecards?
  1. Running the business by the numbers
    1. Are you showing improvement due to decision made because of your numbers?
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Wednesday, 12 December 2018

Mick Holly & Andre Gien

Wealth Scientists

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