Q We are manufacturing company with just over 300 employees. The board meets monthly to review progress against the business plan. It takes quite lot of my time to prepare the monthly board reports and I often wonder if the time spent is worth the outcome. Our reports cover the surplus or loss we make each month and other key indicators, such as cash flow. I feel there could be more value added to our reporting. Do you have any suggestions?
A Your instincts are right. Enlightened reporting is an area of management that can add enormous benefit for yourself, your management team, the board, and the organisation as whole. Reports can help everyone understand what is happening in the organisation and how well you are achieving your objectives. The outcome should, however, always add value by helping you to learn from experience and improve performance.
Reporting should focus on the critical targets in the business and strategic plans and look forward as well as back.
Present information on the four critical areas of an organisation’s performance and not just the financials. You need to cover the key issues of profit or loss, available cash and equity levels. You also need to assess key performance indicators related to your business operations, people, and customers.
Operationally, you need to know whether the business is achieving its production targets and improving its key business processes to continuously increase efficiency and effectiveness and reduce costs.
And does the company have the right people in the right place at the right time to achieve its goals? You need to know how well they are performing, and whether the enterprise is adding value to its human capital through learning and development.
It is important to understand if customers are satisfied with the company’s products, whether the business is innovating to meet changing needs and whether the customer base is increasing or decreasing.
Measuring the performance of the business across these four key areas will create more holistic picture of what is actually happening and provide deeper insights into the capabilities needed for organisational success. Reports that cover these indicators help the board focus on the critical strategic issues across the business. They also help everyone understand how well they and the business are performing. The end result is increased performance and commitment.
This type of reporting can be presented simply as one or two page summary of actual results against planned targets and be made up of mixture of graphs and data tables. Use colour to indicate at glance success (green) or issues that need attention (red).
Read The Balanced Scorecard by Kaplan and Norton, published by the Harvard Business School Press (ISBN 0-87584-651-3), for few more tips.
Q We have recently taken over another small business and must integrate about 10 people into the organisation. The cultures are quite different but they must all move into our building. I don’t want to lose them because they know the business and have specialist skills and knowledge we need. Their departure could also send negative signals to our existing team. What few key things could we do to facilitate the process and bed down the changes?
A Takeovers are always challenging. The outcomes aren’t always what is wanted or expected. People talk about “merging the cultures” but it usually ends up with one culture being more dominant. The result can be disruptive with people from both sides choosing to leave. Your concern is well founded. Without some specific interventions the outcomes tend to be random and generally depend on the relative strength of the two cultures.
Here’s few ideas.
* Don’t force anyone to “fit” your culture. Let new culture develop. This is more likely to meet the needs of the new situation.
* Develop an integrated strategy to incorporate the acquired business and show what the overall aim is for the combined organisation – where and how the new business fits.
• Review your business goals to ensure they adequately cover the new business. Ensure each individual has his or her set of personal goals to fit the overall strategy.
• Provide everyone with regular feedback on how the business is achieving its combined goals and how each person is contributing. This helps people focus on “business” issues rather than “takeover” issues.
• Pay attention to what may seem like “trivial” people issues and resolve them quickly. For example, sort out parking spaces, office layout, start and finish times and, most importantly, remuneration and benefits. People can’t engage effectively if they have unresolved basic needs issues.
Addressing the points above won’t, unfortunately, help you predict the outcome of merging the two cultures, but it will help create an environment that reduces risk and makes the integration more effective.
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