Often, when someone asks you how you’re doing, it’s just a greeting—a way of saying hello. Most of the time, when someone asks us that, we reply, “Fine!” To be honest, we don’t really think about answering the question. It’s an automatic response.
But when someone asks that same question about your business, it’s a whole different story. When it comes to business, asking, “How are you doing?” is a test—and, “Fine!” is an inadequate answer. That’s because unless you know specifically how your business is doing in several critical areas, the chances are that your business isn’t doing “fine” at all.
I often refer to something called “The 4 Decisions” when I speak, coach, or write. These are critical decisions that every business faces. As a growth company these decisions determine your success. Let me summarize these four key decisions briefly (courtesy of Gazelles).
1. PEOPLE Decisions: These decisions focus on getting the right people doing the right things with clear accountability and metrics.
2. STRATEGY Decisions: If revenue is not growing as quickly as you like, then it’s time to re-examine your strategy.
3. EXECUTION Decisions: By simply tightening up your execution habits, you can dramatically improve gross margins and profitability while reducing the time it takes for everyone to complete their work.
4. CASH Decisions: The first law of entrepreneurial gravity is “Growth Sucks Cash”.
Here’s the thing: It’s not enough to simply ask, “How are you doing” in each of these areas. And it’s not enough to answer, “Fine!” You need specific answers to specific questions. Here are some examples of the kind of questions you need to be asking in each of these critical areas.
1. PEOPLE Decisions: Given the opportunity, we would enthusiastically hire every employee all over again. False 1 2 3 4 5 True
2. STRATEGY: Each of our employees can articulate the company’s long-term goal (also known as our “Big Hairy Audacious Goal” or BHAG). False 1 2 3 4 5 True
3. EXECUTION: We have Key Performance indicators (KPIs) which are used effectively to track employee progress and ensure alignment with priorities.
False 1 2 3 4 5 True
4. CASH: We constantly review 12-month cash flow projections with our financial team. False 1 2 3 4 5 True
Naturally, each of these four critical decisions requires more than one simple metric and answer. I just wanted to give you a taste for how the process works. If you’d like a simple (but thorough) one-page assessment form for each of these areas, shoot me an email, or call me at 719-487-1899.
How’s your business doing? It’s probably not fine unless you know the specifics about your performance in the areas of people, strategy, execution, and cash.