Step #5: MANAGE THE BUSINESS – Week #29 of The Financial Operating System®

Prior weekly notes have focused on implementing key components of The Financial Operating System. This week we review chapter 16 and its guidance on an approach to managing the business using the metrics and targets that you set in previous steps to achieve organizational goals. After setting goals (Step #1), defining performance metrics (Step #3), and upgrading accounting processes (Step #4), this step reviews business management processes as you use and learn from reporting and metrics.

Key Concepts:

1. Revisiting Metrics and Targets:

   • Review your notes from Step #3 to re-familiarize yourself with your company’s financial metrics and targets.
   • Focus on:
     • 3-year vision metrics.
     • Annual metrics pacing toward the longer-term vision.
     • Quarterly and monthly metrics to maintain alignment with the annual targets.
     • Weekly metrics to guide operational activities.

2. Operational Planning:

   • Establish a weekly activity plan to align short-term actions with long-term goals.
   • Weekly metrics impose a basic operational framework, ensuring consistency and accountability.
   • Weekly management review and discussion of metrics keeps them fresh in mind

3. Iterative Learning and Adjustment:

   • Metrics and management processes will evolve over time. Initial metrics don’t need to be perfect. What matters is actively monitoring, discussing, and adjusting them.

4. Focus on Execution:

   • Managing the business means driving activities that align with metrics and proactively addressing obstacles to success.
   • Metrics are a means to an end. Use them to manage the business toward your objectives as a business owner.

5. Building Accountability:

   • Establish processes for monitoring metrics, holding people accountable, and ensuring all team members are working toward the same goals.

Takeaways:

Step #5 focuses on the practical application of metrics, frameworks, and operations to ensure the business meets its goals. It highlights the iterative nature of business management and the importance of aligning day-to-day activities with the long-term vision. By creating a clear, actionable framework for business management, companies can maintain focus and achieve continuous improvement.

Next Step:

Business owners can self-implement The Financial Operating System. Chapters are available to download at smartbooks.com/resources or you can buy the whole book from Amazon (the marketing firm version or the general business version).

If you would like assistance with implementation or would like to accelerate results for your business, please contact author Cal Wilder at cwilder@smartbooks.com or book a free consultation with our team directly using this calendar link.