It’s summer. Bright blue skies, puffy cotton candy-like clouds, and colorful flowers abound in gardens everywhere. This description is also a metaphor for the mindset and optimism of entrepreneurs. And in that mindset, like an approaching hurricane for your garden, lies danger not yet encountered. In fact, even serial entrepreneurs make minor mistakes that wreak hurricane-like havoc on their carefully planted business. You need a contingency plan for health and safety prior to a hurricane, and you need a contingency plan for when things go wrong, or you’ll never be able to be successful scaling up your business.
The approach of detailed business contingency planning is one for growing an established business. I won’t address that in this blog as the pattern I’ve seen is that so few entrepreneurs and their business make it to the established, growing stage. I’ve seen many get stuck at $15-50mm in revenue while struggling to break past their growth barriers. My advice here is targeted to those companies. If your business is larger, let this be a reminder of the contingency basics. And, if you have a larger business that doesn’t have contingency planning in place, let this be a warning.
I recommend intervening with contingency planning as early as possible in your business lifecycle; otherwise, there may be no need for discussion of your growing, established business. That’s because you’ve either created a job for yourself (rather than a business) or your business failed in the operational hurricane and your roots were never fully established.
Below are the sweet 16 questions that when thoughtfully answered will protect and grow any size business.
It may take you weeks, months, or years to get all questions well-answered – so why wait? Start your success journey now.
Score your business from -5 (poor) to +5 (excellent) on the following:
- Do you have a written future vision which has been communicated to everyone in the company so that they understand their role in its achievement?
- Are your Core Values established and are they are incorporated into your hiring systems and in your firing decisions?
- Is your WHO (core customer) defined and communicated so all departments understand your description of the “best” customer, and do they have a focus on serving that customer?
- Is your 10-25 year BHAG in place and (at a minimum), shared with the executive team?
- Have you mapped your customer value versus those of competitors? If your are not different, are you at work on adding value differentiators to move you from a red ocean to blue and so the team can articulate customer value?
- Do you utilize Job Scorecards as part of your hiring process and to help all team members know who they report to, what is expected of them, and where to focus their energy?
- Are you constantly A/B testing marketing and/or sales processes? (Current process outcomes are measured creating a baseline and you've tested changes to your process within the last 9 months.)
- Do you have high confidence in cross-functional team members (and new team members) whether you’ve worked with them or not? This is a clear indicator of hiring for Core Values and culture fit through Topgrading hires.
- Is your leadership team open and honest with one another and demonstrating a high level of trust?
- Does every team member (at minimum anyone with direct reports) have 1-5 priorities each quarter including clear success criteria?
- Do all teams (at least functional departments) have Weekly Team Meetings that happen at the same day/time each week with a solution focus?
- Has each department created process maps for their top 3 departmental processes? These are used to train new team members and are updated regularly.
- Do you have an effective NPS (Net Promoter Score) system for receiving regular feedback from customers? Do you try to duplicate success and, when hearing complaints, first weigh complaints against your WHO before making process or system adjustments?
- Have you installed a process for collecting EPS (Employee Promoter Score) to get feedback on the “health” of your employees?
- Do you have a public Dashboard for tracking weekly progress on indicators and priorities?
- Do have a regular system to monitor the financial health of your business? Do you have a minimum of 2 months operations cash in the bank?
Your answers to these questions are table stakes for mid-market firms. If you don’t have a positive number score for each of the 16 questions, then you’re exposed to the business hurricanes that will wreak havoc on your credit, health, company, and team.
Determine which area you will work on first - don't work on more than 3 items at a time. Devote time each week to improving your answers (in chosen priority order) and it won’t be long before your business is one of the few that make it to the established, growing stage. I’d love your feedback on the questions and how you’ve succeeded in implementing great answers.
Hunker down, a hurricane is coming.
Photo Credit: iStock by Getty Images