In his most recent book, Rebound Rules, The Art of Success 2.0, Rick Pitino writes about steps to improvement in a chapter entitled “Achieving Greatness”. He writes, “the steps toward improvement generally require seeking and accepting feedback from colleagues and superiors. Most of us fight the bare truth of honest feedback, but it’s critical in striving to be great. That’s why we watch film of every game and every practice, for feedback on our performance and how to better it. At the end of every film session, I tell my players: The tape never lies. You may lie to yourself, but the tape tells the truth” (Pitino, 107,108.)
I want to ask you, the business owner, some vitally important questions.
What is your feedback mechanism? What is the “film of every game” that provides to you the “basic truth of honest feedback”? Do you know how your company is performing and are you able to focus on weaknesses and improve them? And probably the most important question, how often are you reviewing your “film sessions”?
The answer to these questions is information about your company that shows you the key measurements, statistics, and ratios which reveal your company’s health, strengths, and weaknesses. This is especially critical considering the economic environment that currently exists. Ram Charan in his book, Leadership in The Era of Economic Uncertainty, has this to say to business leaders; “You need information that is detailed, up to date, and unfiltered, obtained quickly and at the source”( Charan, 16. ) The business owner should be reviewing “game tape” daily that especially measures financial health and liquidty. For example, do you know daily your cash balance and immediate forecasts, accounts receivable status and average days collected, inventory levels and days in inventory, sales and orders? Do you know and are you reviewing your company’s profit/loss statement monthly? Is it accurate? Do you know if you had positive cash flow during the month and the source of the cash flow? Knowing this information enables you to make corrections, enhance your strengths, and respond quickly to make your company stronger and allow it to survive in tough economic times.
My partners and I at B2B CFO® can assist the business owner in making sure they have at all times a system that gives them the information, feedback, and a “tape that does not lie” to enable them to strengthen their company, increase it’s value, and thrive in the future.