Think Business — Do You Know How You Are Doing?
In most human interactions, it is common to ask someone, “How are you doing?” While the actual conditions might be the same, the answers will vary.
If you tend to be an optimistic person, you might say, “Life is great,” or “We are very blessed.” If your business tends to be in the same condition, but you are not an upbeat person, you might say, “Oh, we are hanging in there,” or “Things could be better.”
When I wrote “How Fit Is Your Business?” I created 10 measuring criteria for a fit business. Think of it like going to the doctor for a physical and getting your cholesterol and blood pressure checked. The list was an attempt to give a more objective way to determine business fitness.
While going to the doctor is one of the elements for your overall health and well-being, there are obviously other elements (including stress, relationships, fun, achieving goals, etc.) that might come into play when answering or thinking about how you’re doing.
GETTING THE RIGHT ANSWER
The following are a few thoughts that should give you a more accurate and objective way to find a better answer.
1. Know your numbers. Be disciplined, but not obsessed, by looking at the numbers in your business. They should be aggressive but realistic forecasts. They should be measured on the right cycles (weekly/monthly/quarterly/annually) and reviewed and discussed on a regular basis with key members of your team.
You cannot answer the question, “How are you doing?” if you do not have a good handle on the numbers. You are flying blind, and you might be flying right into the side of a mountain instead of above the clouds.
2. Team sport. Your business is a team. It is a village. It is important that you have an ear to the ground and are listening to the voices inside of your business. The coffee machine chatter is every bit as important as the discussions in a leadership meeting. Listening and asking for feedback should be proactive and constant. If you think you are doing well, are your key team members aligned with you?
3. Headwinds vs. tailwinds. When there are tailwinds, you should be exceeding your original targets or forecasts. When there are headwinds, you may be falling a little short and need to put in a bit more effort to catch up. To really know how you’re doing, you need to know whether you have a tailwind or a headwind. An experienced cyclist knows this and does not get too far from home when they have a strong tailwind; otherwise, they will not have the energy to make it back home.
4. Stress. Business is a marathon, not a sprint. You need to pace yourself. There are times that you need to really push (like the spring season), but stress levels are important to acknowledge. Are you or your key folks working normal or excessive hours? Are you able to have some balance in your life (family/friend/personal/work)? Is the workplace calm or a firefighting atmosphere?
5. Positioned for the future. Most company owners want to be in business next year and the following. Most businesses would like to do better next year than this year. I see many owners that only look to the horizon and make very little money in the short term. I see even more that are not positioning for the future. This positioning requires thinking time, energy and some capital.
While I do believe that there are make-hay times and times of more hunkering down, the important concept here is that you are controlling the situation rather than letting the environment control you. The more you can keep the short term and long term in balance, the better you can be.
So, the next time a business colleague or a friend asks how you are doing, at least try to have a balanced (objective and subjective) answer. If it is truthful, it might lead to a constructive conversation that could help you.
At the very least, you will be able to provide some sage advice.