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A few years ago, one of my relatives who used to own a lawn-mowing business was telling me a story about how the crew members were perfectionists about the lawns. “After we’re done, we walk across the street into the adjoining neighbors’ yards, etc., to make sure we’ve done a great job trimming,” he said. Then, I said, “Why walk across the street? Can’t you tell when you’re trimming?” “No, way,” he said. “You can’t tell when you’re on it. It all looks good from that vantage point. You need a different perspective.”
This conversation continually pops into my head ever since I’ve become a business owner. There are things we just don’t see as we are forging ahead each day, toiling in our businesses and our lives. We need to step back and try to see how we’re doing and where we can improve. We need to get off the lawn.
I hear from many business owners who are stuck. Revenues are flat; sales are stagnant. These leaders are looking for a way to get over the hump and really take their businesses to the next level. The solution might be to take a step back and really get to know your business. The solution is open-book management.
One of the greatest benefits of open-book management is awareness. Practitioners and their employees have a better sense of where their companies are and where they are going. Take the following nine-question quiz to see how well you know your company. Be completely honest with yourself because your answers to these questions play a vital role in growing a business.
- Do you have a vision of what your business will look like in five years?
- Do you have a budget that you actively use to run your business?
- Does your budget give you a clear understanding of who your ideal customers are, what they value and how much they value it?
- Do you regularly compare your financial numbers with others in your industry?
- Do you know what the critical numbers are that drive the success of your business?
- Do you regularly sit your team members down and ask them what they think are the critical numbers of the business?
- Are your employees actively engaged in and growing the business?
- Do you evaluate employees to make sure they are working in the right positions for their strengths?
- Do you know who your most profitable customers are? What industry they are in? What size they are? Why they purchase from you?
How did you do? How well did you know your company? Is there room for improving awareness amongst employees and financial planning? If so, I suggest considering open-book management. Open-book management helps build financial awareness through a solid education, communication and planning process with employees at all levels of the company. One of the ways to keep this process consistent is through implementing a biannual high-involvement planning process. This will guarantee that your company is looking at financial and strategic goals in a well-rounded manner throughout the year and addressing goals, objectives, opportunities and threats in a proactive manner.
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