Management guru, Peter Drucker famously said “what gets measured gets managed.” I’m a great fan of managing your business by key numbers. It gave me a clear pulse of the business and gave me clarity on what I needed to focus on before it’s too late. The challenge is that many times entrepreneurs don’t measure these important numbers or they end up tracking the wrong numbers. In this blog I’d like to share four key learnings in this matter:
- Leading vs. lagging indicators – My biggest “AHA” moment came when I learned this distinction. I will give you a simple example of weight to illustrate the point.If you want to manage your weight then getting on the weighing scale will only tell you the current situation. No change will happen by getting on the weighing scale daily. This is a lagging indicator. It is the result of all your previous decisions and actions.If you want to change your weight then you need to focus on monitoring and measuring 2 key numbers that can proactively help the end result of managing your weight. These would be considered leading indicators. Take for example you can focus on:(a) your calorie intake – you could limit your daily intake to below 2000 calories per day.
(b) amount of time you exercise in a week – you could decide to jog for half an hour three times a week.You could set goals here on the amount of calories you burn. It’s easy to measure these days with various watches in the market.
Both are measurable and both are actions that you can proactively take in the future. If you focus on taking actions on these two indicators daily or weekly, then over time they will impact your weight (lagging indicator).
For example in a business context, one of your goals this quarter could be to generate 1 crore of new revenue. This is the Lag measure.
The lead measures or Income Producing Activities (IPA’s) that can impact the business generation are:
(i) Number of Qualified New Prospects that you have contacted.
(ii) Number of existing customers you have met or called today to upsell.
(iii) Number of people on your database or social media channels.
In one of my earlier blogs I shared a slidedeck on how to get teams to execute key goals in more detail. Have a look at how to lead and manage winning teams.
Sky rocket your productivity and quality of work with just doing this one thing once a day!
One of the most important things we can do to scale up a business is to develop a team. Successful delegation is a crucial part of team management and a powerful way to boost your productivity. While most people think they know how to delegate I have found them to be ineffective because they miss crucial steps. With these seven steps you can become an expert delegator:
Step #1: Decide on what to delegate
Before delegating anything, first ask yourself whether the task needs to be eliminated or automated? If the task is necessary and cannot be automated then I put it through the following matrix to see what to delegate:
As a general rule I want to keep all items in zone 1 – The Flow Zone with me. These are tasks that I’m highly passionate about and I’m very proficient at too. These are items that energize me and add the most value to my business.
I want to delegate all other tasks in zone 2, 3 & 4, starting with those tasks in my disconnection zone first. These are tasks that I have a low passion and proficiency for.
Step #2: Select the appropriate person to delegate to.
It was a revelation for me to find that there were things that were in my “disconnection zone” that were in the “flow zone” for other members of my team. This is why it’s important to build a complimentary team. (more…)
If you want to scale up your business and create a saleable asset then you will need to have a systems focussed business. I look at 3 specific areas where your business can deploy systems to scale up and 5 easy steps to create a system.
One of the ways in which I was able to scale up BNI India was through having a clear written sales process. Initially we tested various methods of converting sales. For each test we only changed one variable at a time so that we could clearly see how it impacted conversion.
We kept the things that increased conversion against our benchmarks and we discarded things that were lower than the benchmark.
The research shows that if you have a written sales process that you and your team follow it increases your sales by 20% compared to companies that don’t follow a written sales process.
I am great fan of systems because they allow my business to have consistency and get predictable results. Systems enhance my team’s productivity.
My advice to entrepreneurs is to initially focus on these 3 systems:
- Marketing systems – You need to have systems where by you get the right qualified prospects into your funnel. I only focus on 3 areas within marketing:
(a) Systems to get new clients.
(b) Systems to get existing clients to spend more.
(c) Systems to get existing clients to spend more frequently.
- Production systems – These are documented workflows on how to execute a particular job. I put emphasis on quality, consistency and speed of the output. These are relevant whether you are in a service or manufacturing sector.
- Administration systems – This is the support system that makes everything work in a cohesive manner. This would include things like your accounting, human resources, vendor management and customer support amongst others.
These are 5 simple steps I use to systemize any process in my business:
- Identify – which processes are (a) key to your business and (b) repetitive in nature.
- Document – Like a recipe, note down every ingredient and sequence you take to successfully complete the task. I use Evernote for capturing the steps.
- Optimise – Once you have captured all the steps ask yourself these 3 questions: (i) Which of these steps is unnecessary? Eliminate this. (ii) Which of these steps can be automated? (iii) Which of these steps should be done in a different order to improve the results?
- Test – Go through your recipe again, executing only what’s written. Do you get the expected result? If you don’t then it’s likely you missed a vital step in writing down the recipe.
- Share – Once it passes step 4 it is ready to share. Systems are a key to successful delegation. If your team is able to replicate the results following your process “recipe” then you have truly created a successful system.
Systems create consistency, enhance productivity and make delegation possible. A systems driven business fetches a much greater valuation for your business. After all my definition of a business is that you can be away from it for up to 4 weeks and will grow by itself. If you don’t have systems then you won’t have a business that can grow by itself.
So which part of your business are you going to systemize first? Please share in the comment box below.
HOW TO MANAGE WINNING TEAMS – Created with Haiku Deck, presentation software that inspires
Leading teams that are clear about what needs to be done, who play full out and achieve their goals is every leaders dream. While most business schools tend to focus on strategy, entrepreneurs really struggle with execution. Management guru, Ram Charan says that 70% of strategic initiatives fail because of poor execution.
So why is executing difficult? Execution is difficult because there is a battle between the URGENT vs IMPORTANT things. Let’s look at these in more detail:
Urgent work is the daily work – operations, support, sales etc. Urgent things drive us. We tend to react to these things. Onthe other hand important things are our goals – Where we want to be. This is what we drive. Unfortunately we are busy being busy. Urgent work always wins over important, unless we develop some key disciplines to help us execute.
There are 4 tried and tested disciplines to great execution that have been identified by authors Chris McChesney, Sean Covey & Jim Hulling in their excellent book: “The Four Disciplines of Execution”
- Focus on the Wildly Important Goal (WIG)
- Act on the lead measure
- Create a compelling score board
- Cadence of Accountability
While most people focus on ‘doing’ more to achieve more, ultra successful entrepreneurs have a morning ritual that sets them up for success. Their morning ritual is about focusing on ‘becoming’ more so that you can start doing less, to achieve more.
Most of them nurture their body in the morning with water, a healthy breakfast and light exercise. They nurtured their mind with meditation or prayer, inspirational reading, and journaling.
Let me share a powerful template that I have been using with incredible results. I would say this one productivity hack was the biggest game changer for me. I start the day with a couple of glasses of warm water to hydrate myself.
The Hour of Power
- 20 minutes of energizing exercise – I do an unusual exercise that gives me both a physical and also a mental workout. Not to mention that the exercise also gets your ‘happy hormones’ like endorphins and dopamine activated. I use a rebounder or mini trampoline. There are 3 brilliant benefits of bouncing on a trampoline:
(a) A great cardio workout with minimal stress on my joints. I suggest that you wear a heart rate monitor to monitor your progress too. The one I love is the Fitbit.