Tag Archive for: Metrics

Management and culture make a difference

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If you don’t believe that management and culture make a difference in your company’s success, you are wrong.  Let me give you an example from Toyota that I learned about from a recent podcast.

When Toyota was making their first moves to manufacturing in the US, they teamed up with GM. They formed NUMMI and needed a manufacturing facility. The choose the old GM Freemont plant, considered the worst workforce in the US automobile industry.

Before NUMMI, GM’s Freemont facility was in disarray. Quality was terrible, there were serious personnel problems, and chaos reigned. Workers even intentionally sabotaged the vehicles they worked on. The factory was ultimately shut down.

NUMMI re-hired most of the Freemont workers but made changes – BIG changes.

Seniority rules changed.

They focused on teamwork – the same uniforms for everyone and cafeterias served all levels of employees.

Emphasis on quantity changed to quality, and stopping the assembly line to correct an error became the right action.

Training, continual improvement, and consensus decision making became the norm.

In two years, Freemont’s production was as efficient at Toyota’s Japanese plants, and quality as measured by the number of defects was similar to Japan’s as well. All that was done with with what was once the worse workforce in the industry.

The lesson here? Culture and valuing the right things matter. How management leads the company is important. Leaders make a difference.  Good leadership turned an entire manufacturing plant around by changing the style of management and culture.

If you have trouble with your team, have you thought about how the company’s management team may be contributing to the problem?  We can help you.  Contact us at https://www.linkedin.com/in/cmatt/ or use the CONTACT US page.

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Cash in the bank

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Having cash in the bank doesn’t mean your business is making money.

I’ve worked with many business owners who closely manage their cash flow and bank account balances. That’s great. I do the same thing both for my personal and business accounts.

Unfortunately, some stop there. That’s a mistake.

I’ve met business owners who have never looked at their P&L or balance sheet. Focusing on whether you can pay the bills or if you have money in your account does not tell you the whole financial picture.

For example, can you answer these questions:

  • Are your COGS too high?
  • How much did you invest in that last project?
  • Which of your products, services, or divisions are making money and which ones aren’t?
  • Are you incurring expenses that you can reduce or eliminate and use that money better to grow the business?
  • How much are you putting toward the bottom line?
  • How long can you fund operations if your business took a major hit?


As a fractional COO, I value the insights and know the importance of understanding the financial side of your business (and the KPIs that go hand-in-hand). Not every visionary or business founder likes looking at reports and numbers, but there are things we have to do even if we don’t enjoy them.

I’ve convinced clients that numbers matter, and once they see it, they get it, and they wonder why they didn’t look at them before.

If you aren’t sure where to start, we can help.  Contact us on LinkedIn at https://www.linkedin.com/in/cmatt/ or https://www.linkedin.com/company/opal-partners-group/or use our contact form. CONTACT US

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Driving blind

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No sane personal turns off their headlines and attempts to drive down a road at night.

Cars have headlights for a reason:  to illuminate what’s ahead and help you get where you are going.  Mirrors and gauges serve similar purposes.

Businesses are no different. You need tools to help you understand how you’ve done, the health of the business, and what lies ahead.

Extending the analogy, mirrors are like financial and other reports that tell you where you’ve been.  They are backward looking.

Your speedometer, tachometer, temperature, and fuel gauges tell you about the current operating condition of your vehicle much like production numbers, quality control info, customer service data, and other KPIs tell you if your business is operating as expected.

And your sales pipeline, financial forecasts, and other leading indicators give you an idea of what’s ahead, just like headlights on a car or traffic warnings from your navigation system.

It is critically important that you have a set of metrics – financial and operational – to really understand the state of your business.   If you don’t, you are driving blind.

I’ve spoken with too many business executives who believe that as long as they can pay their bills, have some money left over, and production is getting product out the door that their business is doing fine.  Perhaps it is.   But maybe they don’t see warning signs of troubles ahead because they aren’t looking at the right gauges.  Trouble could be around the corner.

Hemingway says it best in The Sun Also Rises:

“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”

Don’t let your business slowly steer off course and force you to suddenly deal with simmering issues that may have been prevented or corrected if you had only known.  Make sure you are using the right metrics to understand your business and not driving blind.

If a fractional COO can help you with your metrics, CONTACT US or reach us at http://linkedin.com/in/cmatt.

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Structure

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When many people hear the word “structure” in a business sense, they immediately think about the organizational structure or the org chart.  That’s an important element of structure, but it is not the only one by far.

In the Operations hierarchy, Structure is any framework that allows you to measure the outcomes of your efforts or that helps protect you by planning for the unforeseen.

Structure is focused on performance, protection, and compliance.  Elements of Structure for your business may include:

  • KPIs
  • Financial reports
  • Protective agreements (MSAs, NDAs, customer and vendor contracts)
  • Business continuity plans
  • Disaster recovery plans
  • Compliance with governmental rules and regulations

Why Structure is Vital

Certain aspects of Structure are readily identifiable.  People are inherently that employees need to know who they report to or who has the authority to make decisions that affect customers and the business.

Going further, most business owners and executives know they need to measure how their business is doing.

Are you succeeding or heading for troubled waters?
Financial reports are necessary to understand the fiscal health of your business.  Look for trends in your financials to ensure a problem isn’t slowly overtaking you.

Likewise, your team needs and wants to know if they are winning.  Having good Key Performance Indicators (KPIs) or published team goals allows everyone to know if they are on track.

Other aspects of Structure aren’t as obvious but just as important.  Planning ahead for a negative event isn’t fun but it cannot be avoided.  You don’t want to figure out what to do when you lose a big customer, your building burns, or the economy tanks after it happens.  If you wait until disaster strikes, you may be operating out of fear and emotion.  Having a clear plan of action determined in advance makes navigating tough events easier. 

Other elements of Structure include being compliant with rules and regulations, having strong contracts, and having good documentation so you can have the best possible outcome if a legal issue arises.

Structure connects your Process to your Strategy by gauging your company’s performance and protecting your investment.

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