Scaling Up with The Rockefeller Habits with Rhythm Software
Rhythm Systems is the Best Rockefeller Habits Software to Focus and Align Your Team
Scaling Up Software
Rhythm Systems and the Rockefeller Habits
- Systems and Skills to Implement the Rockefeller Habits 2.0
- Scaling Up People with Rhythm
- Setting Personal SMART Goals
- Role and Goal Clarity
- Job Scorecard
- Retaining and Growing the Leadership Team
- Scaling Up Strategy with Rhythm
- Key Elements of the 7 Strata of Strategy
- One-Page Strategic Plan (OPSP)
- Scaling UP Execution with Rhythm
- Rockefeller Habit 1: The Quarterly Rock
- Rockefeller Habit 2: The Right Data with KPI's and OKRs
- Rockefeller Habit 3: The Right Meeting Rhythms
- Scaling Up Cash with Rhythm
Best Scaling Up Software to Implement the Scaling Up One-Page Strategic Plan (OPSP)
Align Your Team Around a Single Vision with Software
In 2014, Verne Harnish released an updated version of his classic book Mastering the Rockefeller Habits. Thousands of entrepreneurs relied on the book’s simple framework of the three Rockefeller Habits—Priorities, Data and Rhythm—to grow and scale their businesses. Twelve years after the original book was released, Verne and his team published Scaling Up: How a Few Companies Make It...and Why the Rest Don't, meant to provide updated examples and new insights on the growth tools so many companies found invaluable for over a decade. The practical framework of the Rockefeller Habits 2.0 and the tweaks to the classic One-Page Strategic Plan (download the OPSP template) are welcome updates for long-time fans and provided a platform for new business leaders to discover these growth tools for the first time.
Patrick Thean, CEO and Co-Founder of Rhythm Systems was there from the beginning and worked very closely with Verne to create these growth tool.
Our Rhythm strategy execution software platform was originally built to drive execution of the One-Page Strategic Plan and help companies whose growth has hit a ceiling of complexity that can no longer be managed on a piece of paper, much less one page. Rhythm has come a long way since then, and our platform is still the best software solution for middle market companies looking to implement the growth tools and ideas outlined in Scaling Up Rockefeller Habits 2.0. Rhythm Scaling UP software provides the system to act as the best entrepreneurial operating system to help you run your business and support your operational planning.
The Scaling Up book is organized around the 4 Key Decisions that leaders must address: People, Strategy, Execution, and Cash. Below, we’ll use this same framework to show how Rhythm gives you the systems and skills you need to scale your business and implement the Scaling Up - Rockefeller Habits 2.0 framework.
Scaling Up People with Rhythm Software
Attract and retain A players with role and goal clarity
Verne makes the case that People is the first Key Decision to address because relationship issues can drain energy and sink your efforts with four strategic decisions regarding Strategy, Execution, and Cash. Using Rhythm Strategy Execution Software as your Scaling Up software solution, you can build accountability and clarify roles using Job Scorecards and creating KPIs for each role complete with clearly defined success criteria. You can use our dashboards for transparency and continuous feedback. Providing role and goal clarity and encouraging alignment and accountability using Rhythm will help you develop leaders and engage your team.
Here are a few of the major People topics introduced to us in Scaling Up that you will find in Rhythm's scaling up software:
The Company Leadership Team
“‘The bottleneck is always at the top of the bottle,’ notes management guru Peter Drucker. Challenges within the company normally point to issues with, or among, the leaders.”
- Verne Harnish
Verne addresses issues for top leaders with tools to help clarify personal goals and define accountabilities and outcomes. While this is a great place to start, at Rhythm Systems, we believe that the best leaders do more to create the right environment and bring out the best in their teams; after all, as Jim Collins teaches, the best vision in the world without the right people to execute it will not get you very far. That’s why we’ve developed specific products and programs to support leadership development and team accountability. We believe that software alone is not enough to create great leadership. You need the right skills and the right systems to execute your strategy.
Setting Personal SMART Goals
Verne recommends all leaders complete what he calls a “One-Page Personal Plan” to identify and clarify your goal around Relationships, Achievements, Rituals and Wealth. This is a worthwhile endeavor for leaders to do some self-reflection, and our Rhythm software is an ideal place to track personal goals, establish timelines and success criteria and develop personal accountability to achieving those goals by tracking them weekly. In fact, you can track as many “private” goals in Rhythm as you would like as you work to improve yourself as a leader, without having them on the public dashboard.
However, we’ve found that many leaders find it difficult to prioritize setting aside time for improving their leadership skills and investing in leadership development. This is viewed as “soft stuff” by many leaders and can easily be kicked to the back burner in order to focus on more direct revenue-generating priorities. Additionally, many well-intentioned leaders who make the time to work on leadership priorities have blind spots that don’t allow them to develop in the areas that most need their attention. This is why we offer an executive coaching program that includes 360 feedback and leadership assessments to help put some real accountability and data behind your leadership improvement efforts. If you are serious about getting better as a leader, don’t just fill out the paper tool—consider hiring an executive coach to help you.
Role and Goal Clarity
The next piece of the leadership puzzle Verne lays out is clarifying functional and process accountability in your organization. The purpose of these exercises is to be explicit about who is responsible for each role and the key process in your organization, what the results/outcomes are for those roles and processes, and some key indicators to know whether or not the accountable person is on track. Establishing this kind of role and goal clarity is key for success—if people don’t understand what they are supposed to do and how to be successful, they will never succeed. Rhythm software is a perfect tool for establishing this kind of clarity and a great place to monitor the processes (Priorities) and key performance indicators (KPIs) that emerge from this discussion.
In Rhythm, you will see that every Priority and every KPI should be assigned an owner, have a clear definition of what success looks like, and be visible for all to see. In order not to be blindsided by the final result, it is important for the KPI to be tracked and discussed weekly if possible. During quarterly and annual planning meetings, you should discuss, debate and agree as a team on what success looks like and what failure looks like so that you can stay in love with your annual plan all year. This is the Red-Yellow-Green success criteria for each KPI. Here are some quick tips to set SMART goals with an infographic.
- Green is your goal. You will create your plan for the purpose of achieving your Green goal.
- Red is an unacceptable result. It is the definition of failure.
- Yellow is the warning zone between Green and Red. Here you still have time to make adjustments before it’s too late.
- SuperGreen is the stretch goal and should signify a time to celebrate.
Team Alignment and Accountability
In addition to clarifying expectations, we believe that creating a culture and nurturing an environment where team accountability thrives is essential to your success as an organization. In fact, we’ve developed a framework for building team accountability—the 5 C’s of team accountability—that you can implement using our Rhythm software. Take our team accountability assessment to determine whether your team needs to go beyond “FACe” and “PACe” and proactively build accountability patterns into your company.
Attracting and Hiring the Team
“Attracting and hiring A Players, at all levels of the organization, is as critical as landing the right customers.” - Verne Harnish
Hiring the right people—those
When you are hiring, we recommend using a methodology called Topgrading. Topgrading is a method of recruiting, interviewing, selecting and retaining talent developed by Brad and Geoff Smart that is designed to increase your likelihood of hiring and retaining A Players. You should read our 10 Topgrading Tips for Job Interviews blog article for more detailed information on winning the talent war.
The first step for hiring is creating a Job Scorecard for the role—a simple tool to help you clarify the purpose and measurable outcomes for the role before you begin the search. In Rhythm, we have a Job Scorecard (sometimes referred to as an employee scorecard) screen where you can identify the name of the role; who the role reports to; the purpose for the role; the desired results and KPIs the role is accountable for; the key responsibilities the role must fulfill; the skills, traits, and competencies required; and the Core Values of the company which outline how the person filling the role must behave.
In addition to a screen to document the Job Scorecard, Rhythm allows you to use this valuable tool to gain alignment, have performance conversations and develop leaders over time. You have a private Meeting space connected to each Job Scorecard where you can document notes, agendas and action plans for improvement. If you’re confused on a Job Scorecard vs a Job Description click on the link for more information.
Retaining and Growing the Leadership Team
“Once you’ve hired your team members, it takes a great manager to keep them happy and engaged. Failing to develop these managers throughout the organization can become a major growth barrier.” - Verne Harnish
Gallup statistics have long confirmed that managers play an outsized role in the engagement and retention of the talent on their teams. As the saying goes, “People leave managers, not companies.”
An engaged team equals a high performance team. Creating team alignment and accountability, providing visibility to company goals and setting clear expectations enhances employee engagement and motivates teams to achieve success.
Rhythm software provides tools to plan annual and quarterly goals; establish and track employee engagement KPIs; maximize meetings, and create cross-functional visibility that takes teams out of silos and encourages communication that positively impacts project success. Rhythm helps:
- Increase job satisfaction by focusing on employees on relevant goals.
- Encourage communication within and across teams.
- Save money and time by increasing productivity.
- Create engagement and personal ownership.
- Build collaborative teams through the effective management of projects.
Grow Your Talent
To win the talent war, you have to do more than just hire and keep your best people—you have to grow them. You need leadership development to help you take your current team to the next level as your company grows. All of your managers need to learn to coach their teams, create accountability and have the right performance conversations.
The comprehensive Job Scorecard feature included in the Rhythm platform will help you document job roles, understand and create KPIs to track desired results for those roles and track how well people are doing—every day. The Team Performance Dashboard will also give you an eagle eye's view of how your team is performing and whether your Actions, KPIs and Priorities are on track for success. You can quickly clarify accountability for specific company results and pinpoint who on your team might need help at a glance.
If you’ve identified gaps in your managers’ leadership skills, our Accountable Leaders and Teams leadership development program can help you drive results and develop your leaders for the future. Rhythm has an excellent team of business coaches with decades of real world business experience in the middle market that can assist you with growing your talent.
Scaling Up Strategy with Rhythm
Rhythm allows you to document, collaborate and work in a live environment, and it provides a workspace for each relevant strategic topic. It features long-term internal strategy items like Core Values, Core Purpose, and BHAG. It also includes external, market-focused items like Sandbox, Brand Promise and Core Customer, and it spans across your 3-5 Year Plan, your Annual Plan, your Quarterly Plans and even Individual Quarterly Rocks where you can make comments, add attachments, enter and update planning notes and create action items so that you can get work done at your weekly team meetings. Once you have the strategy defined you can execute the business operating system that Rhythm provides through its cloud-based software and methodology and make adjustments as needed due to changes in external environments.
Here are a few of the major strategic topics introduced to us in Scaling Up that you will find in Rhythm:
“Successful athletes know the power of having a strong core, no matter what the sport. Growth firms require a similar core to maintain a strong culture.” - Verne Harnish
The Core, defined as Values, Purpose, and Competencies are the underlying elements of your company’s strategic initiatives and lay the foundation for your company culture.
Core Values are the handful of rules that will remain constant over time that you believe are key to the long-term success of your business. They already exist and are evident in the behavior of individuals that represent the very heart of the organization. Discovering, understanding and encouraging these Core Values will strengthen your company’s culture and will provide a good basis for every individual in the company to make decisions on a daily basis.
Rhythm not only gives you a place to document and share your Core Values in the software
Understanding and reinforcing your Core Purpose will provide inspiration for people on a daily basis. People need to be inspired. They need to understand how their daily work connects to a greater good that is being served through the success of the company. Your Core Purpose will answer the question, “Why?”
When you document your Core Purpose in Rhythm, you share the story behind the purpose as well; don’t skip this key element of using storytelling to bring your Core Purpose to life.
Core Competencies are unique systems and processes that make you different and superior to your competition. They build on your collective knowledge about how to coordinate diverse skills, activities, and technologies to create a competitive advantage. These complex combinations may appear simple on the surface but have actually been honed to near perfection over a long period of time. Your Core Competencies should make your company stand out from the competition, should be difficult for competitors to imitate and should be applicable to a wide range of business opportunities.
For each of your Core Competencies in Rhythm, you should think through and document how it will make you different and competitive as well as plan for how to refine and develop the competencies over time with your SWOT analysis (Strengths, Weaknesses, Opportunities
Key Elements of the 7 Strata of Strategy
“Without a powerful, industry-dominating strategy, you’ll spend the next several years generating very little traction in the marketplace.” - Verne Harnish
Verne’s team crystallized the key strategic elements from the One-Page Strategic Plan into a worksheet called the “7 Strata of Strategy.” He refers to it as “the page behind the page” designed to help your team get into the specific questions to answer to nail your niche and dominate your marketplace. Verne suggests pulling together a “Strategic Thinking Team” or Council to work on these elements iteratively; we call this a Think Rhythm and have integrated many of the same key elements into our Rhythm software platform.
One piece of Verne’s stratum 2 is Core Customer—or Who. You don’t sell your product or service to a demographic. You sell it to a real person. Your Core Customer is someone you can get to know, develop a relationship with and understand his or her wants, needs and fears.
In Rhythm, you have a workspace to determine the right Core Customer by listing your successful customer, their characteristics and the value you provide them.
Clarity around your Sandbox should answer the question, “What market will you dominate over the next 3-5 years?” This is typically discussed when analyzing your winning moves that can double your business in 3 to 5 years.
Rhythm gives you a framework to clarify the products/services (what) you will sell, the market segments/industries you will sell to, the geographic regions where you will sell and the distribution methods and channels you will use to sell.
Working on your Brand Promise will require you to identify and understand your Core Customer, your company’s core capabilities and your unique position in the market. Having clarity around what is meaningful to your customers and what you will promise to deliver will provide direction on internal improvement initiatives, marketing messages and sales, and delivery processes. In Rhythm, we provide a Brand Promise screen that prompts you to identify your Core Customer, their needs, your Brand Promise, key activities that support your ability to deliver your Brand Promise and how you will measure your Brand Promise KPI.
Profit per X
Your Profit/X or financial engine is one of the components of Jim Collins’ Hedgehog, and one of the three key areas to consider when working on your BHAG. Your Profit/X is how you choose to make money; it is a strategic metric, not an operational one. This ratio is a key driver in your financial engine, and when you make decisions about how to spend money (which products to launch, where to open new locations, how many people to hire), you should be guided by asking how it maximizes your Profit/X. Here are some helpful BHAG Profit/X examples.
Your BHAG—Big Hairy Audacious Goal creates a vision of future success for your company. It should paint a picture of what things might look like 10-20 years in the future when you have achieved this wildly ambitious, measurable goal. Our classic BHAG examples will also provide inspiration for your people and will create a framework for strategic decision making to help you define yours. In Rhythm, we have provided a workspace for your team to collaborate and work on some additional concepts necessary to identify your Hedgehog and determine your BHAG. These are Purpose/Passion, Best in the World and Profit/X. There is also a place to record any specific actions necessary to live your Core Values, fulfill your Core Purpose and achieve your BHAG.
One-Page Strategic Plan (OPSP)
“The bigger your company, and the faster it’s growing, the harder it is to keep everyone on the same page. The problem, of course, is that there isn’t a single page around which to align.”
- Verne Harnish
The newly-revised One-Page Strategic Plan (OPSP) is Scaling Up’s answer to turning your dreams into reality. This is the one song sheet you can get the whole company to sing from in order to achieve success together. The tool is composed of seven columns meant to provide a framework detailing the vision and core strategy of the company, a common language for those goals and a “routine for keeping the vision current.” The one page plan should be reviewed at every quarterly and annual meeting to ensure the team is all on the same page.
Rhythm allows you to document, collaborate and work in a live environment, has a workspace for every topic on the OPSP and even makes it possible to see how each of the elements is linked to the others. Your strategic one page plan in Rhythm is living, breathing, actionable, agile, dynamic, collaborative and responsive to the realities that come with bringing a vision to life. As Patrick has said, “Getting aligned is only half the battle—staying aligned is the hard part.”
Scaling Up Execution with Rhythm
Once you’ve done all the difficult work of attracting, retaining and growing the right people, and you’ve set a strategy for your company, you still have to do the work. Failure to execute successfully is the downfall of many companies, and Verne shares a checklist of 10 habits and three disciplines he’s identified as essential components of successful execution - the three disciplines are Priorities, Data and Meeting Rhythms. (Download the Rockefeller Habits Checklist.) Rhythm is a perfect tool to implement the right skills, habits, and disciplines to execute your One-Page Strategic Plan on a day-to-day basis.
Here are a few of the major execution topics introduced to us in Scaling Up that you will find in Rhythm:
Rockefeller Habit 1: The Priority or Quarterly Rock
“Individuals or organizations with too many priorities have no priorities and risk spinning their wheels and accomplishing nothing of significance.” - Verne Harnish
A good theme or Main Thing will include a memorable name, a measurable target, a deadline and some form of celebration or reward. All of these elements are supported in Rhythm in the Team Annual Plan and Team Quarterly Plan screens, and the information is displayed in Rhythm as a constant reminder of what is most important. The quarterly theme keeps the team aligned for the next 90 days.
If the purpose of a theme is to bring a plan to life and reinforce what is most important, then the theme must be derived from the Main Thing or top Priority you want your people focused on. Along with building your theme around your top Priority, you should measure the success of your quarter and the criteria for achieving the reward or celebration with a Critical Number. In Rhythm, you are not only asked to establish the Critical Number for the quarter
3-5 Quarterly Priorities (Rocks)
Here you will set specific targets for the quarter and identify the top 3-5 priorities—the quarterly Rocks described in the Rockefeller Method—that must be accomplished over the next 13 weeks in order to move the company forward as part of the Rockefeller Strategic Plan. Quarterly planning meeting is where the rubber meets the road, and you create an execution-ready plan from your strategic plan. Our patented Energy Map allows you to ensure you have the right amount of effort and energy from the team to get the work done on your top Priorities. Achieving your Quarterly Rocks requires focus, and our software is designed to help you do just that.
Rockefeller Habit 2: The Right Actionable Data KPIs and OKRs
Big data analysis has become mainstream in and within reach of companies of all sizes. Yet leaders also need plain old human-gathered intelligence to get a gut feel for the market and what is happening in the company so that they can make the right decisions. - Verne Harnish
KPIs - Key Performance Indicators
In addition to having two Critical Numbers that help you make progress on a particular Priority for a short period of time, you should also have a set of metrics that provide data about the ongoing health of the company over time. In Rhythm, we call these KPIs. KPI dashboards can be created for the company and for each department and allow you to know at a glance whether or not your plan is on track and your business is in balance. Each KPI can be categorized into one of four categories—Employees, Customers, Processes, and Revenue—and each KPI will have its own unique success criteria. Defining the success criteria in terms of Red, Yellow, and Green allows you to update the status of each KPI every week with the corresponding color, allowing you to view the KPI dashboard and know immediately where you are on track and where you are off track.
Rhythm Systems KPI Resource Center for all you need to know about Key Performance Indicators. Looking for some KPI Examples to help get you started? Check out our additional KPI and KPI dashboard blog articles.
No one knows better what holds a person back from being highly productive in their job than the person in that job. The people in your company have the answers, you just have to figure out how to get those answers out of them and into action. Verne talks about de-hassling your organization—that is, finding those things that are getting in the way and removing those obstacles. There are a lot of ways to go about gathering this kind of information, but the way that we have addressed it in Rhythm is through an exercise called Start, Stop, Keep. We suggest that as a part of your quarterly planning process, you ask employees to identify the top three things they would like to see the company or department Start doing, the top three things they would like to Stop doing and the top three things they think are working really well that they want to make sure they Keep doing. As part of the Quarterly and Annual Planning Meeting screens, Rhythm provides an interactive Ideas Board for employees to go in and enter their Starts, Stops and Keeps prior to the planning session so that they can be reviewed, evaluated and enacted each quarter.
Your front line employees are also the ones closest to your customers, so it’s important for you to hear what they are hearing and to create a mechanism for capturing and logging those comments. Rhythm has a special section called Client/Employee Feedback where these comments can be logged, flagged for follow up and reviewed as part of the weekly meeting agenda.
Accountability Management System
Verne created a worksheet to help establish accountability and determine the specific actions that must be taken to complete each Priority. Using Rhythm software, you are able to accomplish this by creating Actions that are linked to each Priority. Each Action identifies the Who, What, When for that Action and allows you to think through the sequence and timing of major milestones for each Priority. You have a calendar board view to manage your Actions each week so your week doesn’t manage you! This allows for strategic management from the executive team to cascade down to all of the team members.
Rockefeller Habit 3: Scaling Up Meeting Rhythms
Verne teaches us that routine can set you free, and the Rhythm software is designed specifically to support a healthy routine of Strategic Thinking, Execution Planning and Doing the Work in the form of Annual, Quarterly, Monthly, Weekly and Daily meetings. Each of the meetings serves an important purpose and has its own unique agenda. Here is a look at how you can use Rhythm’s Think, Plan, Do framework to support your meeting rhythm.
The Rockefeller Habits Daily Huddle, as we call it, is a 10-15 minute standing meeting designed to sync your teams up at least one time every day. The agenda is simple - Good News/Victories, Daily Metrics, Top Priorities for the day and
The purpose of the Weekly Team Meeting is to keep your team focused, aligned and accountable to the execution of your quarterly plan. The meeting should not be focused on updating each other on the status of KPIs and Priorities, but instead, it should be focused on problem-solving, decision making and identifying critical adjustments that need to be made to your plan during the quarter to achieve success. Rhythm provides a way to ensure you have the right discussion in your Weekly Meetings, including 13 week customizable dashboards for Quarterly Priorities and KPIs; a place to log and review Employee & Customer Feedback; screens for Individual Focus where each team member can plan out their successful week; an All Actions List to capture your Who, What, When; and a Parking Lot for topics you want to save for another time. The software provides a recommended agenda for strong Weekly Meetings that you can follow in order or customize to fit the individual needs of your team.
Download a free Weekly Staff Meeting Agenda.
Monthly Management Meeting
Unless the DNA of the senior team—namely the knowledge and values required to make good decisions—is sufficiently instilled within the middle managers on down, the top leaders will find themselves increasingly overwhelmed by the demands of a growing business. A well-structured Monthly Meeting—focused on learning, sharing and problem-solving that includes senior leadership in addition to middle managers and supervisors—is a great way to develop leaders in your company. Rhythm supports Monthly Meetings in a section called Meetings. In Meetings, you can add attachments, store meeting notes, plan your agenda, invite attendees and create Action items.
Quarterly Planning Meeting
The purpose of the Quarterly Planning Meeting is to determine how you will accomplish your Annual Plan and move your company forward. It requires you to determine the handful of priorities that you and your team must be focused on right now in order to be successful. Your goal is to set up a road map for the next 13 weeks that will align and focus the energy in the company. As part of the Plan Rhythm, Rhythm software allows you to create your Quarterly Plan for the company, each department and each individual, and by having the ability to link all of these Priorities to each other, will give you a visual demonstration of exactly where the energy in your company is focused. Rhythm also allows you to link your company’s Quarterly Priorities to your Annual Priorities so that you can be sure you are focused on the most important Priorities throughout the year.
Annual Planning Meeting
The purpose of the Annual Planning Meeting is to align your team around a handful of Key Initiatives for the year that—once completed—will move the company closer to achieving its 3-5 year targets which will ultimately move it closer to achieving the 10-20 year visionary BHAG.
Your Annual Plan will provide inspired focus for your people and will serve as the foundation of each one of your Quarterly Plans. In this meeting, you should focus on columns 1-4 of the
Scaling Up Cash with Rhythm
“You can get by with decent people, decent strategy, decent execution… But not a day without CASH! You run out of cash… Game over!” - Verne Harnish
Whether you’re self-funding your growth, using an operating line of credit, taking on investors or working with a private equity firm, you know that growing your business requires a consistent flow of cash and a disciplined approach to forecasting and managing it. Here are a few ways Rhythm can help you achieve your cash goals.
The Right KPIs & Dashboards
One key to good cash management is accurate forecasting. Not only do you need to keep a constant eye on what your cash balance is, but you also need the ability to look out and see where you’ll be in the weeks and months ahead. There’s a natural flow to your cash, a series of events that must occur before a dollar lands in your account. Thinking through these events will help you identify the Leading Indicators necessary to properly forecast future cash needs. Sales KPIs, Delivery KPIs, and Accounting KPIs are a good place to start. Once you’ve identified the handful of measures that give you the right information, you can then set up a special dashboard to monitor and ensure that the top 3-5 most important KPIs stay within a healthy range. This special dashboard should help you think through the following three questions: 1) How many months can we operate the company as-is with no changes in our current spending rate? 2) What is the probability of sales closing and converting to cash in time to avoid hitting the cash wall? 3) What actions should we take and when should we take them by in order to stay healthy in the event any of our KPIs fall below an acceptable level?
Manage and Maximize Your Cash Conversion Cycle
Your Cash Conversion Cycle measures the amount of time it takes from when you spend a dollar on anything in the business until you get that dollar back from your customers. It includes your Sales Cycle, your Production Cycle, your Delivery Cycle, and your Accounts Receivable Cycle. Setting up the right metrics to measure how well you’re managing each of these processes can help you predict and shorten the time in the full Cash Conversion Cycle. And the shorter this cycle time is, the faster your cash is flowing. A creative approach to rethinking your business model can also lead to significant breakthroughs in cash-flow management. Anything you can do to delay payment or speed up a receipt of payment will help you make improvements here.
Continuously Improve Your Processes to Minimize Waste & Maximize Profit
They say that revenue is vanity, profit is sanity and cash is king. There’s a good reason why profit is sanity. While top-line growth is necessary to thrive, at the end of the day, profit is necessary to survive. If you’re consistently spending more than you’re taking in, your cash reserves will eventually run out. A successful organization will have a disciplined approach to continuously improving its operations and processes to eliminate any wasteful activities or expenses. Just reducing operating expenses by a few percentage points can have a substantial impact on bottom-line profit and cash flow. Every dollar you don’t overspend on suppliers, employees or overhead is a dollar you don’t have to borrow or a dollar you can invest back into the company. A Rhythm dashboard can help you identify and manage these continuous improvement activities by clarifying what success looks like, determining the activities that must be completed to achieve success and assigning responsibility to the right people for completing the activities.
Drive Revenue with the Right Winning Moves
No matter how good you are at improving processes and managing your Cash Conversion Cycle if you don’t have a constant stream of revenue, your cash will run out. Keeping an eye on customer health and ensuring your sales teams are operating on all cylinders is a good start, but having the right sales/marketing strategies and executing them well over time is the key to achieving reliable revenue. The wrong approach to the market or poorly executed plans will inhibit your ability to forecast well and hit your short-term targets. To ensure your revenue engine will remain healthy in the coming years, you have to constantly be asking the question, “What’s next?” Companies that are too distracted by daily work to develop these strategies will begin to struggle as market conditions change and current strategies run their course. Rhythm can help you establish a great system for identifying and evaluating opportunities, testing your assumptions and advancing your revenue-generating Winning Moves (key strategic initiatives designed to 2x your revenue) to help you scale your business profitability.
Keep Your Cash Partners Happy and Informed
Regardless of whether you’re borrowing money from an outside source or working to keep the owners well informed, having the right information at your fingertips and visible in an easy to understand format can go a long way in building confidence. Not only can you demonstrate full mastery of the numbers that matter with Rhythm, but you can also link Annual Initiatives, Quarterly Rocks (priorities), and individual team members work to these metrics, allowing you to tell the story behind the numbers. If you are reporting monthly or quarterly to an investor group, bank or board of directors, rather than spending hours and days building the same Powerpoint to deliver the same message time after time, you can simply open your Rhythm dashboards to display the most current information, explain what’s driving the numbers and share your strategies for improving underperforming areas and maximizing your bright spots.