Wednesday, 15 May 2019

When Should We Review?

Our lives are spent reviewing – although we may not actually realise it.  We “review” what time it is so we don’t miss that vital appointment or flight.  We “review” the speed at which we’re driving – particularly when we pass a sign reminding us of the speed limit or to slow down.  Once we’ve reviewed, we take some kind of action.

When it comes to business, again, there’s “subconscious review” which I encountered as a bank commercial lending manager.  I was always amazed at how many of my small business clients knew to almost the dollar/pound or other currency how much profit they’d made for the month and year to date.  It was just “instinctive”.

When I ask, “When do you review”, I’m talking about the business.  For some, it’s a case of when something happens that forcesthem to review (e.g. when a new competitor starts undercutting them).  Others (particularly larger organisations) tend to review at periodic intervals. What suits one doesn’t always suit the other.

The first thing we need to do as business owners is work outwhatneeds to be reviewed and when. For some owners, as long as they continue to show an excess of income over expenditure, they may feel they only need to review their financial position once a year when it comes to closing the books.  They may, however, review their competitive environment much more frequently.

What about staff as well and the “annual appraisal”?  We need to reward our good performers and motivate those who need it.  We need to know if what we’re paying is “competitive” with the market, that is, with any other business in the same line of work that we are.

We could go on thinking of what needs to be reviewed – equipment, uniforms, condition of premises, and so on.  Quite often, we’ll get an untimely reminder that maintenance needs attention (e.g. a pipe bursts…).  

Who should be involved in the review?  We should never underestimate the knowledge our staff have of what's going on with customers and preferences, for example.  Suppliers may also have good ideas.  

After reviewing, the critical step is reacting  within an appropriate length of time.  If a competitor drops their prices and we lose business because we didn’t (or couldn’t) react quickly enough, we have a problem.  If salaries in the industry go up and we can’t raise them, we risk losing our best staff.  Reviewing sometimes means anticipatingwhat others might do and when.  This comes from both experience and what some call “gut feeling” or instinct.

What needs to be reviewed in our business, and when’s the best time to do it?

I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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