How your business operates is always important, but it’s particularly critical in more challenging times such as the ones we’re facing at the moment. One of the keys to operating effectively is good governance, underpinned by accurate and relevant management information (MI).
When you’re battling to stay buoyant in stormy economic times, talk of governance may seem a distraction and possibly an expensive one to implement – something to address when you have a little more breathing space. But regardless of the size of your business you should keep a keen eye on how it operates and what processes, if any, are in place. Here are three reasons why:
This is by no means an exhaustive list. But these are three points that, if addressed, will help a business thrive during uncertainty.
Underpinning good governance is the data that informs it. But not all data is equal. You need to make sure you’re recording and assessing the information that is most relevant to your business.
The metrics you choose to measure should give you a 360° view of the business, rather than one that is fragmented into departmental responsibilities. A good starting point for almost any professional services firm is these five areas:
Within those areas you should only focus on metrics that really influence your business strategy. This is about capturing quality data that gives you insightful information rather than being overwhelmed by a huge quantity of it. They need to be measured consistently across an organisation too, so that you achieve a single version of the truth that can then inform the decisions you make at all levels.
We’d also urge you not to forget about the future. It’s very difficult to steer a business successfully looking in the rear-view mirror. That means the information you gather shouldn’t just reflect past or present performance, it needs to forecast what’s coming. After all, you can’t change the past but you can guide yourself to a better future.
Hopefully this short overview will help you improve your approach to governance and better understand the MI you need to guide it.
If you’re thinking about what management information would benefit your business and how you can improve its governance, we’d love to chat about how we can help.