I once drove a car across town for a friend of mine. As I was trying to get used to this vehicle I was not familiar with, I noted the yellow sticky note on the dashboard. It was blocking part of the instrument cluster so I pulled it off. After doing so, I noticed the check engine light was on. When I told my buddy about the light being hidden by his sticky note, his response was “Yeah, that came on a few months ago and it bothered me. I put the yellow sticky note on there so I couldn’t see it. It doesn’t bother me any more!”
Think back to that last time you were driving down the road and suddenly you hear the chime and the check engine light comes on. How did you feel? What did you think? Odds are, when this happens to you, you either hate it or you ignore it. Which one are you?
As the leader of your company, you have to pay attention to the warning signs in your company. If you’re the person who just ignores them – I hate to tell you but the problems don’t go away if you don’t pay attention to them. As my Grandma Lucy used to say, “ignorance is no excuse. “
Review Your Financials
Watch your financials – every month. That’s right – every month. If you are not looking at your financials every month, it’s the same thing as putting a yellow sticky note over the check engine light. If you ignore them, potential problems don’t go away.
For some, you don’t really know what you’re looking for when reviewing your financials. If that’s you, I want you to know that’s not a problem but, staying in that position is a problem. If you are the leader of the company, you have to learn. When you review your financials every month, they will start to tell you a story that you will not see by looking at them every once in a while. They will tell you when things are going well and give you warning signs when things are starting to turn for the worse.
Establish the KPI’s You Need to Track
Key Performance Indicators are additional dashboard lights that can tell you if everything is going ok or if you are headed for trouble. The KPI’s will give you an early indicator if problems are on the horizon for the company as a whole or better yet, will let you know which team member isn’t meeting your expectations. The nice thing about KPI’s is that you can address the area of greatest bleeding – and there is always an area of greatest bleeding. Problems in your KPI’s will usually be seen before they show up on the P&L but make no mistake, if you ignore them, they will result in poor performance on your P&L.
There are several different KPI’s that can be tracked. If you are not tracking anything yet, pick one or two. Start there and when you get them under control, add one more. As you get that one under control, add one more. Don’t try to do it all as once. you will overwhelm yourself as well as your team.
If you need help getting the tools in place to “watch your dashboard”, give us a call. We can help. And as for my buddy’s car – well, he had to get rid of it when the engine died.