Last month, I wrote about looking at key business indicators on a weekly basis. This month, I’m suggesting that you “Keep The Pressure On” by consistently setting financial and operational goals and following up on those goals.
Over the years, I’ve talked about the value of good follow-up with a number of executives. While many of us have heard complaints from staff about the need for (and value of) follow-up on business matters, we’ve found a very high correlation (admittedly anecdotal) between the incidence of tasks being completed and good (some would argue relentless) follow-up activity. The simple fact of the matter is that people respond to appropriate pressure to accomplish tasks. If they know that someone will be “checking-in” to see that a task is completed, they are much more likely to complete that task despite the fact that they may tell you otherwise. People respond to deadlines! Or, as one executive I know puts it, “People respect what you inspect”!
Tasks, goals, milestones, deadlines (you choose the term) are ultimately reflected in financial performance! If you are striving to meet day-to-day operating goals, you will definitely see the results in your monthly financial statements.
The monthly financial review process is a perfect time to talk about overall goals and accomplishments. If it was a process improvement task, it will almost certainly show up as a cost savings (or lack thereof if not accomplished on time). If it was a prospecting or sales goal, it will show up as increased revenue (or lack thereof)! If it were a new project, program, or R&D activity, it may show up as a lack of spending (that, too, can be bad if resources that were to be invested for future benefit are not appropriately spent). If it was a collections goal, it will show up on the balance sheet as too high a level of accounts receivable and too little cash.
Are there goals that won’t impact the financial statements on a monthly basis? Sure. Saving a couple of hours of staff work won’t necessarily show up as a cost savings from one month to the next. But over time, these will show up as you hire more people to implement inefficient processes.
In other words, every goal or objective your company has (or doesn’t have) will eventually impact the financial statements either positively or negatively. If you keep the pressure on your team to consistently achieve their goals, the results will show up positively in the financial statements. If you don’t, it will show up negatively in the financial statements.
The choice is yours, but either way, properly prepared financial statements will tell the story about how consistently you keep the pressure on to achieve business results.
If you need help with your business, financial plans, or goal setting, please give me a call at (314) 863-6637 or send an email to And, remember . . . Your Cash Is Flowing. Know Where.
Copyright @ 2006 Homza Consulting, Inc.