In today’s increasingly turbulent and uncertain business environment, an increasing number of businesses are being devastated by changes they failed to notice, failed to understand and failed to creatively respond to.
Within the past two years we have seen a troubling confluence of economic factors (significantly rising inflation and interest rates, material supply shortages, the great resignation, recent declines in consumer demand, the ability to hire and retain good talent and real or perceived drops in employee productivity).
With an uncertain economy ahead, it is more important than ever for companies to get the most from efficient internal processes, their teams, customer acquisition and properly allocated business investment.
In this environment it is incumbent on Management to focus on profitability. They must translate their mission and strategy into concrete objectives and key performance indicators (KPI’s) and desired results. This articulation of long-term and short-term goals helps business owners channel the energies and abilities of their employees and utilize their assets more productively.
They must revisit their strategic plan, if they have one, to reflect on the new realities.
Now is the time to identify new avenues for potential competitive advantage and improved operating leverage.
Many middle market firms have not thought about or formalized their strategies going forward. It is in the mind of the owner or CEO.
It has been said “if you can’t measure it, you can’t manage it”.
Many middle market companies have not clearly identified and communicated their goals, objectives and KPI’s to their employees.
A strategic plan is a forecast regarding cause and effect. KPI’s formalize and make explicit this relationship between objectives and results so they can be managed.
Developing meaningful KPI’s clearly reveals the value drivers for superior financial and competitive performance. They also help identify the infrastructure that will facilitate the Company’s long-term profitability and growth.
While KPI’s and the results obtained therefrom are essential to effective management, the HOW we get those results is equally if not more important.
Too often Management establishes KPI’s and then finds ways not to compensate the employees for reaching their goals.
It is our experience that either KPI’s have not been established or have been adopted ad hoc, without formal discussion with the management team, resulting in too many KPI’s which are often in conflict with each other or are counterproductive.
Depending on the industry we recommend KPI’s in the following areas:
Measuring & understanding
2. Financial performance
3. Internal processes and employees
Success is a moving target. Even organizations that operating profitably are wary of the future.
You may need to alter your long-term & short-term strategy based on your available resources, your competitor’s actions, your client’s response to the economy and your ability to hire & retain top notch employees.
This is an unprecedented labor market. It is one of the most perplexing and difficult labor markets in recent memory.
For business leaders, hiring and retaining the right people and employee performance/ productivity are major issues.
Workplace models have also changed radically over the past two years. Hybrid work schemes dominate the landscape with some business allowing employees to work from home some days but required to be in work on specified days. Other businesses are attempting to return to normal onsite work schedules.
Hiring the right team and retaining them has become a major priority. The days of everyone is replaceable are over.
If we have learned anything over the years, it is to expect periodic economic fluctuations.
Those companies that revisit their strategic plans, KPI’s and their management teams are sure to be among the survivors when the economy shifts again.
We are the firm you need during uncertain times.