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Ken Keller: Nine questions plus two hours equals a better organization

Brain Food for Business Owners

Posted: May 27, 2012 1:55 a.m.
Updated: May 27, 2012 1:55 a.m.
 

Peter Drucker, along with best-selling authors Jim Collins, Jack Welch and Rick Warren have co-authored the book "The Five Most Important Questions You Will Ever Ask About Your Organization." I added four questions to the list that I believe are worth answering.

If you own a small business, perhaps spending a few minutes per question can suffice to move your company forward. If your organization is larger, the questions can be the basis for a strategic company review.

The first question is: "Who is our client?" This sounds simple but many organizations have failed to define their current or future client base. Eliminating possible client types reduces both cost and chaos and at the same time improves focus and decision-making. Better client definition increases revenue and profitability.

The second question is: "What does the client value?" It is the rare company that knows. Those organizations that understand what the core client values and match the offering to the need flourish.

The third question is: "How well do our products and services match the needs of our current and future clients?"

Some organizations answer questions two and three from the inside out, meaning management presumes to know the answer. The better organizations work from the outside in, doing market research to uncover and confirm what the client really wants and needs in the future.

The fourth question is: "Which products and clients are profitable and where?" Analysis is needed to determine where and how the company is making money, which clients are contributing to profit and where the company can improve margins.

The fifth question is: "What is our mission?" Surprisingly, many companies do not have a mission statement.

Developing a mission statement is critical for focus and decision making while also providing clarity. A mission statement states what the company does for the client.

The sixth question is: "What is our main focus?" This question dissects the mission statement (which many in an organization can't remember) by asking "How do we fulfill our mission for the client?

For decades, NASA had a lengthy mission statement created when the agency was founded. But for the first 15 years of existence, the main focus was "to the moon and back." The taxpayer understood the main focus and so did every employee, contractor and subcontractor involved.

The seventh question is: "What is our plan?" Do we have a strategy? Do we have goals? Can those goals be measured? Who will be responsible for executing each portion of the plan? When will this be done? What do we need to execute the plan? What do the financials look like?

Putting these things together in a plan means the organization is focused on results and performance, and not effort. Effort is never measured, because everyone thinks they are working hard; ask any employee if in doubt!

This leads to the eighth question, "What are our results?" This is a challenging question to answer if goals aren't set as part of the planning process.

Most organizations do a pretty good job at setting sales or revenue goals. It's what happens below that line (expenses, including payroll) where things are murky. Companies need to focus more on tying costs to revenue generation, and expenses to improvement in product and service delivery.

The final question requires time to answer, once the implications are thought through, "If we were having this organizational review three years from today, and we were looking back over those three years, what has to have happened in the company for us to be happy with the progress?"

What is it worth to answer these questions? What value to you place on moving from where you are today (mediocre, okay, fair or good) organizational performance to very good, superior or great results? These questions are free, but the answers, provided you are honest and do something with them, are priceless.

Ken Keller is CEO of STAR Business Consulting Inc., a company that works with companies interested in growing top line revenue. He can be reached at KenKeller@SBCglobal.net. Keller's column reflects his own views and not necessarily those of The Signal.

 

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