When I worked for a global accounting and audit firm back in the 1990s, we followed detailed procedures and checklists. (Quick joke: Why did the accountant cross the road? Because that’s what they did in last year’s file.) These checklists ensured we followed proper standards, improved quality, and reduced risk to both the client and the accounting firm.
Pilots and surgeons use checklists. Do you?
Some businesses, especially high growth businesses, may say they are “too busy” to slow down and formally document their policies, procedures, tasks, and management protocols. Yet some of my best clients have achieved ISO quality certifications, COR safety certifications, or, more importantly, developed their own standards for consistent performance. Other businesses have defined their operating procedures but ignored sales, marketing, finance, management, succession, accounting, and everything else!
Methodology defined: Methodology is about the nuts and bolts of what you do in your business, and how you manage the business. It includes everything you do.
Think of this as the “Standard Operating Procedures” for your entire business, from marketing and sales, order taking, fulfilment, invoicing, collecting, quality control, and customer relationship management.
Questions to analyze and optimize your methodology:
- OPERATIONS: How do you make money? Many contractors charge by the hour or by the project. These companies need to track their operations on an hourly or project basis. They need daily information to monitor business performance in real time. How are you tracking your operations on a daily basis?
- VALUE AND RESULTS: How do you consistently deliver a quality product or service to all of your customers, all of the time?
- CUSTOMER EXPERIENCE: What parts of your overall customer experience, from ordering to fulfillment to invoicing and payment, do your customers receive value from, and what parts are a hassle for them and cost them extra time and money? How can you continually improve and make your customer’s life easier?
- MARKETING: When you receive a referral, what are the procedures to record the lead and to respond? What is your success rate?
- SALES QUOTES: How many outstanding quotes—numbers and dollars—do you have? What is your conversion rate?
- BEST PRACTICES: I guarantee you that you have hidden or invisible best practices in your business where someone is really good at doing something, but this procedure is not captured nor used throughout the company. What are your invisible best practices?
- MANAGEMENT: The best companies that I’ve worked with have learned how to think and act like much larger companies. That approach actually accelerated their growth. They now take a proactive and professional approach to everything that’s important in their business. They have formalized management systems, procedures, plans, and metrics. How do you manage your business on a daily, weekly, and monthly basis? Are you proactive or reactive? How far ahead are you looking in your business? How do you control your business, or is it controlling you?
Methodology is about understanding, thinking about, and systematizing everything you do. How are you continually improving your productivity and profitability?
Next week, we’ll continue on to the fourth M: Monetization, and how everything you do creates or consumes cash.
If you’d like to discuss how I can help you to increase revenues, profits, and valuation by formalizing and enhancing your methodology, please call me at 1-306-992-6177 or send me an email at [email protected].
Thanks for reading!