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Oct 2Tom Matthews

How does your company compare?

Oct 2Tom Matthews

Good company bad companyThere are many measures of how successful you are.  One of the easiest and, I would argue, most important is your financial results.  As the person that brings so many of you my CFO services, I have great insights into who is doing well and who is struggling.  To help you better understand your business, I have created a table that highlights practices and results of the better companies and those that are struggling. I hope you enjoy

Doing Well

 

Struggling

Good people managers.  This seems to be a universal behavior of my most successful clients.  The man or woman at the top knows how to get the most from their staff.  It is a very complicated process.  These bosses want to be liked and respected though respect is much more important.  They are not best friends with any staff but are interested in their personal lives.  There is no free ride for anyone – not even family.  If the person is not performing, they are trained and warned.  If they still don’t succeed, the person is terminated.  These business owners know that there is not one indispensible person in the organization.

 

While there are many bad behaviors, the two worst are 1) not proper evaluation then ridding the company of the wrong employees.  Too many excuses, too many chances.   This wrecks good staff morale and is also permission for the employee to perform badly.   2) setting staff up for failure.  These owners try too much to define the process rather than define the goal.  The result is frustrated, micro-managed staff that have to be mind readers to know what you really want.
These business owners understand that creating a company framework is important.  Make a decision once and create an SOP (standard operating procedure).  Now the staff now what is expected and how to do it.  No guessing. The struggling companies are polar opposite to the good companies with regard to operating procedures.  Nothing is written down.  The person doing the job wants to keep the processes a secret because he/she believe it provides job security.  Each person doing a job has a different way to do it.  This creates a lot of wasted time and a much higher error rate.

 

This business owner does everything he can to delegate all the day to day work.  You never catch him fixing a computer, dealing with returns or taking vendor calls.  She is all about looking forward, dealing with the big accounts, creating new product lines.  This business owner knows that the amount of sweat on his brow is no measure of anything.  It’s about how well the company is doing.

 

This business owner is a tornado inside a hurricane.  Moving fast, putting out fires and dealing with problems.  She is very proud of the fact that she is the first one in and the last to leave every day.  The reality is this is all bad behavior.  While this owner is fixing problems, the good company is running right past to be much more successful.
There are never surprises about how much cash she has in the bank.  It might be a lot, it might not be enough.  But no surprises.  This business owner believes in the third pillar of business (sales, Production and Finance).  Yes, this is an unashamed plug for the work that I do but the facts are there:  the good companies have a good financial manger in place. Maybe this owner has a numbers background or their CPA says he has it covered.  Some mistakenly believe that checking the bank balance every morning is good enough.  HORRIBLE MISTAKE.  Almost all of my clients come to me because they are having cash flow issues and don’t really understand why.  What a shame,  these companies have a great product, great staff and are going to fail because there is no one to help with the financial management.

 

These are the main differences between those that are really doing well and those that are really struggling.  It’s not rocket science.  But if you see some of yourself in the struggling category, make the change.  Get some help, read a book.  It will make you more successful.

B2B CFO®

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