What is a blind spot? A blind spot is something we fail to see, it is out of your typical line of site and we miss what is there unless called to our attention. In this blog series we are going to talk about the 5 Blind Spots most business leaders with less than 50 employees have.
5 Common Blind Spots Leaders Have Are Not Seeing How To:
- Plan and Review Finance Planning & Execution
- Hold Employees Accountable in a Collaborative Way
- Run Superior Business Meetings
- Monitor Overall Company Performance
- Manage Financial Aspects of Your Company
The aim of this blog series is to remove these common business leader blind spots by focusing your attention on each issue and bringing visibility and understanding to concepts that will be easier to see and, therefore, improve over time.
Blind Spot #1 – Disregarding the importance of Company Finance Planning
To be clear, “Company Finance Planning” for our purpose means defining what you want your company to accomplish financially and how you will know when you achieve it. A company plan includes several consistent financial benchmarks that we won’t go into here and these are often very specific to each inidividual company, despite there often being similar KPIs. For now it is sufficient to understand that a good company finance plan will include meaningful definitions for the following items:
- Core Finances
- Base Expenditure (Overheads etc)
- Base Income (Consistent)
- Three-Year Goals
- One-Year Goals
- Current-Quarter Goals
- Current Primary Company Issues
Like most written descriptions, they get better over time through the process of discussion and revision. This is one primary reason why many business leaders fail to see the value in finance planning; they try it a few times but don’t return to the information consistently enough for it to become highly meaningful for everyone involved. They then disregard the Company Finance Planning strategy and discipline thinking it isn’t that helpful when in reality they failed to implement and execute it effectively from the outset.
A second reason many business leaders overlook the importance of Company Finance Planning is that we are not typically very good at it initially. One of my favourite sayings comes to mind when writing this: “anything worth doing well is initially worth doing poorly.” This is often the case with Finance Planning. It takes time to get the required sense of when to push a team for clarity and when to let a concept rest for the time being. Additionally, it can take some trial and error to discover which questions to ask to identify true value for a team rather than simply receiving specific facts or statistics.
A final reason why many business leaders fail at finance planning is that they lack consistency. Financial Plans should be reviewed in detail every 90 days for them to become engrained enough to begin affecting peoples behaviours and decisions. We use a full-day planning session every quarter with our clients to maintain clarity over the next 90 days and reinforce long-term targets. This repetition of reviewing, discussing and adjusting is what breathes energy and clarity into the company’s overall direction. And consistent performance reviews provide the necessary feedback on whether the company’s efforts are matching the company’s ambitions.
Finance Planning should be a business leader’s super power rather than a blind spot. We hope this article compels you to see the value in company planning and reflect on whether it was more about the quality of execution than the strategy itself that led to past failures. Like many things in business, the more you do it the better you will become!
In our next blog post we will be covering Blind Spot #2: How To Hold Employees Accountable in a Collaborative Way.
Until next time, enjoy the process!
We hope this blog has helped you identify some areas of focus required within your business. We have created this series of blogs to assist you in gaining improved financial control throughout your business.
Need more advice on problem solving? Contact us today for more financial insights