Keeping Score and Driving Improvement in your Business Value… Part 3

Introduction 

In this Blog series our first article focused on the difference between working “In the Business” (ITB) and “On the Business” (OTB) and why it is important to do both. 

The second article explored potential OTB measures and the recommended approach a business Owner should take in establishing a regular routine of making time each month or quarter to review results, re-set targets, and take action to improve the priority value drivers for their business. 

This third and final article in the series goes deeper into the OTB routine and the processes to drive it. We also provide an example scorecard for you to use to help you get your OTB tracking process up and running. 

On the Business Scorecard 

You will likely be tracking your “In the Business” measures i.e. Revenue, Profit, Margin, OPEX, Working Capital position, etc. on a monthly basis, along with other operational “heartbeat” measures, for example Sales Pipeline, confirmed sales orders, Customer or Employee churn, on a weekly and/or monthly basis.  

As the OTB value drivers and measures typically have a longer-term focus, the tracking cadence can be monthly but is more often undertaken quarterly. Depending on the areas you choose to focus on to drive improvement in the value of your business, we recommend keeping a separate “OTB” scorecard to use in your regular reviews.   

The discipline of keeping an OTB scorecard and updating the key numbers will help you to see quickly what is on and off course, and where corrective action is required. The scorecard will also collate and maintain a view of historical performance which is often very useful in your annual planning and Quarterly review processes. 

Click below to get the example scorecard that will help you to get started. While we have included some measures and “results” in the example scorecard their purpose is to illustrate how to set-up and use the Scorecard.  The measures you choose to use are likely to be quite different and will depend on what your view of your priority focus areas are.  

We recommend also that you try and keep your first scorecard to only a “few” measures (maximum 3-5). Focusing On Your Business is a long game and may seem at first somewhat of a luxury in terms of the demands on your time. Allow yourself time to get use to the process and get some wins on the board. Once you are more comfortable you can expand your focus and drive the improvements more aggressively. We know Rome wasn’t built in a day and and sadly nor will maximising your business value happen overnight.

Focusing on and taking decisive actions to improve your OTB value drivers is, over the long term, one of the most important and impactful initiatives you can invest in as a Business Owner. Getting clarity around what really drives the value of your Business and applying this ‘Plan, Do, Check (review), Act’ cycle into “how you operate” will ensure that you are in the best possible position to achieve a better outcome if and when you choose to step back, exit or transition from your business. It should also mean that the business simply operates better and will be a more enjoyable experience for you, your team and customers on the journey!  

Like a lot of things, the idea is simple but the execution takes time and discipline to pull off. If you want to take a closer look at what it will take to get this approach working in your business, then please get in touch.