Management Meetings, like many of the fundamental business strategies, are often regarded as not particularly valuable. This article focuses on the strategies required to make an Effective Management Meeting the linchpin of your financial control.
As a quick reminder, there are five core disciplines business leaders should ensure are well implemented and maintained for a strong and adaptable business.
The five disciplines are:
- #1 The Discipline of Practical Company Planning
- #2 The Discipline of Using a Business Accountability Chart
- #3 The Discipline of Effective Management Meetings
- #4 The Discipline of Monitoring a Simple Company Scorecard
- #5 The Discipline of Better Financial Control
This article focuses on #3 in the series: The Discipline of Effective Management Meetings. You can find previous articles at betterexecute.com, with subsequent articles published over the coming weeks.
Why is an Effective Management Meeting Required?
Although there are many reasons why Effective Management Meetings are necessary, three important reasons are to improve Accountability, Financial Analysis and Problem Solving. Here is how:
Your team needs to develop and maintain a high level of integrity in adhering to financial parameters. Too often, companies will take their finances for granted without understanding the ebb and flow of income, expenses, overheads, outsourcing and other aspects of your financial control.
Your Weekly Management Meetings make each department manager and individual aware of their own role in your company’s financial viability, far beyond the simple knowledge that they need to be making the company money.
It is often not the lack of income but excessive expenses that become the undoing of small to medium-sized businesses, so a brief weekly assessment of your financial metrics will give everyone a greater understanding of, and accountability and responsibility for your company’s liquidity.
As the renowned management consultant Peter Drucker states: “What gets measured gets managed”. Another key part of an effective management meeting is reviewing a Company Scorecard.
Your Company Scorecard tracks five to seven key performance indicators (KPIs) week on week. These KPIs lead into the Accountability point as discussed above, but they also provide a certain sense of clairvoyance, giving you the ability to anticipate upcoming expenses, calculate business trends and even prepare for those unexpected challenges that invariably occur from time to time.
When you begin this monitoring process of financial analysis, it may seem somewhat inconsequential. With only a few statistics to gauge your financial health upon, you will only have a very narrow perspective. But as you consistently maintain this activity week on week and month on month, a far bigger picture reveals itself and with it comes a greater understanding of your company’s financial rhythms.
When considering to the value of solving problems before they develop into bigger problems, it is often said that you should, “kill the giant when it is a baby”.
This sage advice is regularly overlooked without an effective weekly Management Meeting. Any good management meeting will have the majority of its duration dedicated to clarifying and resolving key issues. This requires both skill and discipline. Skill is needed in order to correctly tease out the core issues at play, while discipline is required to identify practical strategies that are implemented and managed until the issues are completely resolved. Often management teams will address the symptoms rather than tackling the root cause of an issue. This allows problems to compound over time, impacting financial health and sustainability.
What is the Agenda for Effective Management Meeting?
Our favourite agenda for high-quality weekly 60-90-minute management meetings is outlined below. Click here to download our free agenda format to use as a starting point in creating an agenda that meets your company needs:
- First Five Minutes – Begin your meeting with authentic examples of what is working in the company. Where are people demonstrating the company’s core values and what’s already working? You have the rest of the meeting to focus on the negatives so spend a couple minutes identifying some positive items to initiate a positive mindset.
- Next Five Minutes – Review the company scorecard. Identify which numbers need to be addressed as issues within the meeting. If you don’t have a scorecard, now is a prime opportunity to discuss and make one. What key financial metrics can be tracked at a weekly cadence to monitor your company’s liquidity?
- Next Five Minutes – Headline information regarding the month’s upcoming financial factors. This can be anything from the receipt of a large payment to the annual staff party. This is your opportunity to share information across the company rather than just within departments.
- Next Five Minutes – Review the tasks and minutes that were generated from the last meeting. Ensure there remains a high level of integrity and accountability amongst the team and across all aspects.
- Next Five Minutes – Review the status of the KPIs for the quarter. The owner of each indicator states how the KPI measures up to the previous month or months, and how it is projected to change. If off track, it is added to the issue list.
- Next Five Minutes – Issue Management. Assess the status of issues discussed previously, ensuring that the solution strategies remain tracked through to completion, again for accountability.
- Next 25-55 Minutes – Top Issue Identification, Discussion and Resolution. Once the company performance has been observed and discussed briefly, it is time to focus the best minds of the company on the issues or opportunities that need to be obtained or resolved. The first step is to identify the top issues to be discussed. This will likely only be a subset of the items on your ‘issues list’ which is maintained week upon week in order to keep items consistently visible until resolved. The time taken for problem-solving is both efficient and effective. It is efficient because it provides a specific time and place for management to discuss issues, thereby reducing the need for multiple repetitive conversations. It is effective because it enables the team to analyse to root issue, rather than becoming distracted by the symptoms. There are many great articles and books on getting to the core issue, such as The Five Why’s by Majed F. Rajeh. Once the core issue is identified, the team can contribute towards a unified solution. Finally, the best solution strategy is debated, defined and attributed to an owner. If it is a larger effort it can be managed in the Issue Management section of your next meeting.
- Final 5 Minutes – Make sure everyone is clear on any the factors that need attention and ask everyone to rate the quality and effectiveness of the meeting. You can ask, “Did everyone get what they needed to from today’s meeting?”
Be sure to start and end on time – or earlier when possible. Use your meeting’s minutes to capture a list of items or topics that were not able to be discussed so they can be reviewed at the next week’s meeting.
Why Your Weekly Management Meeting Might Lack Effectiveness
Although there can be many reasons why a meeting is not seen as effective, the most common reasons are:
- Objectives are not clearly owned by a single person and therefore not followed up on to ensure completion within the allocated timeframe.
- There isn’t a company scorecard to identify what and when things are off track.
- When issues are discussed there isn’t enough discipline placed on first identifying the core problem, causing conversations to go off on tangents.
- A clear agenda is not consistently followed.
- There isn’t enough trust amongst the team to speak openly and frankly about issues.
- Meeting length, times and dates are not consistent.
- There isn’t a clear focus on what to accomplish within a quarterly cycle.
All of these issues are valid reasons for why people may not place a great deal of value on weekly management meetings.
Implementing effective Weekly Management Meetings is the most important discipline to get right with your team. You will keep everyone aware of your financial position and responsibilities and identify problems in the company’s financial landscape while the challenges are still small and manageable. We hope this article has inspired you to tighten up your weekly management meeting in places you hadn’t been thinking about improving. Enjoy the process!