I speak a lot about needing to know if you are on course to achieve your goals and the importance of monitoring and reviewing progress. But what do you do if you find you have missed milestones and are not on course?
At a high level it’s pretty easy to see if you’re not hitting your targets. For example, you haven’t sold as many products as you hoped, or key customers didn’t spend as much as you planned, or your customer base didn’t grow as much as you needed, or a combination of those or many other reasons.
But what might be less clear, and the key question you need to ask and answer, is why?
And this is where mapping how your business flows will really help you…again. I introduce the concept of business flow in my book Your Business Foundation. I show how, by mapping this flow out, you will be able to create a more balanced and connected strategy.
Getting this flow right will also make your business stronger and more effective and is in fact one of the 4 levels of business strength that I talk about in my new report, How Strong is Your Business?
And this flow will also help you get back on course.
If you map out how your business flows you will see that it is made up of a number of cause-and-effect stages. The final stage of this flow comprises the targets you have set. If targets have been missed then that is an effect that was caused by one of the previous stages.
For private companies this final stage and the targets will mostly be financial and your immediate previous stage to it will be focused on your customers. If your customers are not buying enough of what you have to offer or if you don’t have enough customers in the firs place then of course that will cause you to miss you financial targets. So, this previous stage is all about how your business converts enough customers and retains them so that their spend grows.
And this is where many, big companies especially, will stop asking why. The Sales Director will be told that his teams aren’t converting enough prospects and that they need to work harder at selling more products or value-add services into their top customers. He will lose some of his quarterly bonus, as will many of his managers and their regional sales people.
Now, whilst not converting and retaining enough customers may be perfectly valid reasons for the missed targets, asking why shouldn’t stop there. If the problem lies with the sales people you need to know why. Why are they struggling to convert enough prospects or to increase the amount their current customers spend?
Does that problem lie with them and do they need more help like better training on the benefits of the products and services? Or can the problem be traced back to another stage in the flow?
Are the sales team receiving enough quality leads to try and convert? Statistically, they might be converting the percentage of leads expected but enough leads aren’t being attracted in the first place. This then would be the stage prior to the customer conversion and retention – prospect attraction.
So, maybe the problem lies here and the marketing programmes, initiatives and even strategy need to be reviewed. But what if a review finds that the marketing strategy is fine and that enough prospects are attracted but they are turned off before they get to the buying stage?
Is there something wrong with the way the products and services are delivered? If not is there something wrong with the products themselves? And would this explain why spend from traditional customers is also down?
Do they no longer meet the needs to the market in which case did Marketing drop the ball with regards to researching market drivers? Or did individual customer needs change in which case Sales dropped the ball by not reviewing needs and making sure what they delivered aligned with these needs.
Could there be an external factor coming into play here? Could the problem be linked to an external force like the economic climate which is impacting the customers’ own business and hence their spend? In this case, sales people should have strong enough relationships with their customers to have these conversations.
Or were the products or services themselves the cause of the problem? Is a feature missing, is reliability an issue? Is the quality of the service good enough? In which case are the right resources and capabilities in place to create and deliver them?
Or is the cause even more fundamental? Are there bottlenecks that restrict the flow of your business? Was your business too reliant on a key person who left or became ill creating a hole in your resources and capabilities that you weren’t prepared for? Did the flow and direction of your business divert because of an external event that you hadn’t mitigated for?
As-well-as making your business flow as effectively and efficiently as possible, its smooth progress needs to be protected against weaknesses and risks.
If a target or a milestone is missed there is always a reason – a cause.
And as you see, that reason may itself have an underlying cause, which itself may link to a more fundamental cause. Only by mapping out how your business flows and these cause-and-effect stages can you truly connect all its areas and hence find the real reason for why your business is not on course.
And only then can you fix that fundamental cause and get your business back on course.
If your business isn’t on course have you identified and fixed the fundamental causes?
Is your business flow mapped out and are you on course? If not and you need some guidance then contact me and see how I can help you.