C12's 10 Point Check-Up

There are many different ways to analyze our businesses, some simple, and some very sophisticated. Cost and difficulty in interpretation tend to increase directly with sophistication, and most of us small to midsize business owners can really benefit from, and appreciate, the use of simple and easy to use analytical instruments.

The following is such an instrument. One that each of us can apply and that incorporates each of the major areas of emphasis we have focused on in our work with C12.  The C12 10 Point Check Up, is designed to give us information which will be useful in heading off problems and making the kind of proactive decisions we need to make to stay ahead of the curve. So much of the data we receive is historical and using it to lead and manage our business is sort of like driving a car using the rear view mirror to steer. As review each of the following points, rate your company on a scale between 1 and 10. 1 being low and 10 high.

1- The first Check Up question is, "Are key customers unhappy?" This is such a basic area of concern. Most of us get 80% of our business from 20% of our customers, or some variation of this version of Pareto's Law, whether it is actual business, referrals, or reputation which translates to dollars. If these key customers are unhappy with us, the indication is that there are serious problems somewhere in our process or system that are causing the problems, and we need to find out what they are and fix them. Another key question would be, "What information are you basing your answer upon?" How do you know what your customers really think? Do you have valid and reliable measuring tools that tell you to what degree they are satisfied? Do you spend personal time with them to know the status of their feelings about doing business with you? Are your key customers unhappy? Rate yourself below. If your key customers are ecstatic give yourself a 10, if they are ready to jump ship, rate yourself 1.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

2- The second question for you to ask yourself is "Is employee turnover too high?" Are you losing more people, especially key players than you should? What is you turnover rate? Is it growing? Shrinking? What is acceptable, and where are you in relation to that number? Employee turnover, of course, relates to so many variables, and can be an indicator of several different problems. Basic compensation policies may need to be changed, some managers may need to be trained or replaced, you may be slipping in the competitive job market, hiring procedures might be lax. High turnover is not only very expensive, it can be an indicator of other serious needs. Rate yourself based on your turnover of employees below. If you are handing out ten year pins by the bunch, give yourself a 10. If your employees never stay long enough to get vested in anything give it a 1.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

3- "What is your rate of adding new business doing?" Are you gaining or losing in the competition to get new customers? If your marketing, R&D, and sales efforts are healthy you should be whipping up on the competition. Here is an example of the truth of the saying, "The trend is a friend." If the trend is up, especially over a three year or longer period of time, you are doing a lot of things right. Contrarily, if the trend is down over a similar period you are heading for big trouble. What is the rate of addition of new customers' business? If it is growing at a rate of 10%-15% or more per year you are a 10. If you haven't had to learn a new customer's name in a while, you're probably a 1. Rate yourself.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

4- "Are your communications effective?" In your business, does the right hand know what the left is doing? Are your meetings boring and unproductive? Do the same mistakes seem to occur and do you keep going over the same ground with your managers in dealing with them? Are you paying too much for rework on items that should have been done right the first time? Do you hear "I didn't know that" too often when you are trying to discuss something with someone who really should have "known that?" Communications are the life blood of business and really can't be too good. Are you confident that all those who continually need to know it, continually know all they need to know, to continually do whatever it is that they are being asked to do with the level of excellence that you need to sustain? If so, you rate a 10. If you're not sure who needs to know what, or why they need to know it anyway, and what's all the fuss about, you might be a zero, but give yourself a 1.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

5- "Are your goals clear, and do they relate to and support your vision?" Is your vision understood and supported by your team? Can all your employees recite you Mission Statement, and do they use it to make decisions in the business? Obtaining "buy-in" to your vision, goals and objectives is a leadership function, and feeling that they are a part of something bigger than a paycheck is one of the most deeply felt needs that our team has. This area obviously relates to the previous question. Vision, goals, core values and purpose are all things that require consistent and clear communication. They don't work when they are articulated just once, typed in a memo, or hung on the wall. These are things that need to be modeled and talked about all the time. They are the fabric of our culture and our culture is who we really are and will be. Every time we are together we need to do something that reminds us of, or supports in some way, those things that are most important to what we are really all about. If you were to take your best customer, or your banker, or a potential investor and ask your average employee to state your company vision, goals, or core values, how confident would you feel waiting for their answer? If you would be wincing and blushing you are definitely are a 1. If you would welcome the opportunity give yourself a 10.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

6- "Does your compensation system support your desired culture?" If you want performance, do you pay for performance? Or do you pay for simply putting in time? Is your compensation strategy an integral part of your corporate strategy? Is your attitude towards compensation proactive or is it hit and miss, something that happens in a reactive way? Are your employees paid well in comparison to your competitors employees in similar positions? If so, is there a significant portion of their pay that is dependent on their performance and contribution to your profitability? If you don't have a clue, and suspect that they don't either, you earn a 1. If you are pushing Lincoln Electric for the next 60 Minutes segment take a 10.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

7- "Are your direct reports working too many hours?" Are you? Is it possible that you are and they aren't? What's wrong with that picture? Overworked and overextended staff make mistakes and this condition is generally indicative of other problems and future problems. We need balance in our lives and our team needs it no less. If you have too many people working too many hours, and it's not a seasonal abnormality, you are bringing trouble to your own house. We can put out at peak performance levels for only so many hours for so long a time. To go beyond that level brings burnout and inefficiency. If you and your team average no more than 45-50 hours you are a 10. If you average 70-90 and they average 40 you are stupid or a masochist, and if you average 40 and they do 70-90 that won't work either. (But it may be preferable!) Rate yourself, are you and your team accomplishing a healthy balance? Are you where you want to be or are your heading there?

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

8- "Are you introducing new products or innovations to existing products as fast or faster than your toughest competitor?" No market is static, today's product is aging faster and faster in our world. Competition jumps out of the woodwork at an alarming rate. No business position or product/service can afford to remain as is for long. We need to be ahead of the curve or we can slip far behind it before we know what is happening to us. How do you measure up to the standard in your area or market niche today? How do you know that? What do you do on an ongoing basis to improve your position? Your security and that of your team depends on your ability to gain and maintain healthy market share and market share is highly sensitive to product quality and product differentiation issues. How does your product or service look today as compared to last year? How about two years ago? Five? If your answer to that question is "Same old, same old" you get a 1. If it is that innovation and improvement have been regular and successful, and that you have a culture that works at keeping that the case you are a 10. Make an honest estimate.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

9- "Are your financial reports current, reliable, and useful to you in operating your business?" Many businesses get in trouble, stay in trouble, or fail because of lack in this area. Do your team members have and do they understand, the critical numbers in the reports? Do they understand how what they do impacts the numbers and are they compensated based on their impact? Managing a business without relevant and reliable financial information, or not having our team with any accountability to them, is like a baseball manager not knowing the batting averages, fielding or pitching statistics of his players. He couldn't help but make his decisions based on emotion or purely gut instinct, and neither can we unless we get equivalent data to run our business. Rate your financial data. If you use it and trust it, and your people understand, use, and are accountable to it you rate a 10. If no one pays attention to it until year-end, you are a 1.

1 - 2 - 3 - 4 - 5 - 6 - 7 - 8 - 9 - 10 Rating __________

10- "Have your recent initiatives been successful?" By initiatives we mean changes of all kinds. Things like entering new markets of installing a new compensation system. There are big and small initiatives that need to be undertaken by progressive leaders. Changes to improve the processes or procedures, or the culture of a healthy business to make it healthier or to keep it healthy. This is a function of clear thinking, risk acceptance, and good planning. We can't really grow if we are deficient in any of these areas. Luck is a fickle partner, we can't trust our future to it. It is wrong to either stick in the mud or to run off half-cocked. Improving, growing, and expanding our businesses require a good balance of clear and forward looking thought, acceptance of a healthy level of risk, practical and thorough planning, and committed execution. If your latest efforts to introduce changes have failed, you may need to take a hard look at the process that you are using to initiate the effort. If your last two out of three moves have worked well, give yourself a 10. If you have done nothing but practice your crash and burn drill, accept a 1.

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Add the total of your ratings together. If your score is 80 or above, your check up is great! You are healthy as an ox. If it is 60 or below, you need to be referred to a specialist for further examination, maybe some x-rays. This check-up is like the one a doctor can give in his office, sort of a once over fast look to see if there are any obvious problems that need to be dealt with immediately. Just passing it doesn't guarantee good health, and it won't last without a good maintenance program. But it is a good practice and one that, when used regularly, can minimize the chance of a major, unwelcome surprise. 

Whatever your answers are today, they may not be the same six months or a year from now.  Life is not static but dynamic. And if we have learned anything about business, it is that it never stays the same. Like life itself, it is ever changing. So, if you scored lower than you would like in any area, several areas, or over-all, don't be discouraged, be proactive. Take responsibility for initiating efforts to improve. Whatever you pay attention to always gets better, so focus on the areas that need shoring up. Also, if your scores were high and things are all great, don't be complacent. The law of thermodynamics that says that all things proceed from order to disorder has not been repealed. It is at work in your business. Don't back up, press on. Make a great thing ever better.

C12 is all about Helping Christian Business Leaders Build Great Businesses for a GREATER Purpose. Learn how C12 can transform you. Contact Ken Gosnell today and ken.gosnell@c12group.com.

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