Imagine it is the final session of the year with one of your favorite clients, Zoe. Together, you are celebrating her year-end profits and revenues that set new records. Her staff is ecstatic because she was able to pay substantial incentives for the first time ever. She intends to invest a portion of her proceeds in a new locale. Yes, there were obstacles along the path, but for the first time Zoe felt that the efficacy of her business was not entirely dependent on her. Her group stood up and played a crucial role in making it happen.
As you and Zoe reflected on the difference-making factors, six essential steps stood out.
1. Begin with the conclusion in mind
During your first coaching session with Zoe, you asked her questions that prompted her to consider her long-term goals for her business and family. You discussed her exit strategy and timeline and established a value objective for her business. You assisted her in determining the incremental profits her business must generate to sustain the target value.
Having determined her exit objectives, you instructed her on how to use Breakeven PLUS to calculate the required sales and margins for the business to grow sustainably. Then you assisted Zoe in creating a budget that would serve as her monthly financial road map.
You asked Zoe to visualize her optimal work-life balance in addition to the figures. While on vacation (something she hadn’t done in years), one of her objectives was to spend as much time as possible offline. She also desired to devote her work time performing duties she enjoyed and excelled at.
2. Involve Your Team
During her first-ever off-site retreat, Zoe explained her team’s objectives. In her post-retreat report to you, she stated that her team appreciated her trust in them and hearing about her business goals and aspirations. In turn, the team expressed their frustration at being sent in too many different directions. They even told Zoe that she could have better utilized her time. This resulted in an engaging discussion regarding the areas in which they believed Zoe flourished and those in which she did not. Some of it was difficult to hear, but she forced herself to concentrate on listening rather than being defensive.
3. Create a Meaningful KPI Scorecard
You and Zoe created a Key Performance Indicator (KPI) Scorecard of monthly goals linked to her yearly objectives during your next meeting. Some of the objectives were monetary, including revenue, gross profit, labor costs, and expense controls. Other objectives included marketing, infrastructure, and customer satisfaction.
Because you wanted her KPI scorecard to fit on one page, you and Zoe evaluated the importance of each KPI to her overarching yearly objectives. If it measured something essential to achieving the objectives, it remained on the scorecard. If not, it was discarded.
4. Create Source Individuals for each KPI
No longer was Zoe solely responsible for achieving the objectives. So that she could take corrective action along the way, she had to establish accountability and structure for measuring progress (or lack thereof). Each KPI objective was designated to a Source Person on the team by Zoe. This individual was responsible for achieving the objective, but could enlist or assign others to accomplish it.
5. Hold monthly SET meetings to evaluate KPI performance
You assisted Zoe scheduled a monthly meeting of her Strategic Execution Team (SET) to assess her KPI scoresheet. You instructed her on how to construct an effective agenda and lead the meeting. Before each meeting, a member of the team updated the scorecard with the actual monthly results for each KPI compared to the objective. During each meeting, Zoe and her team celebrated when they met or exceeded the objective and discussed the best course of action when they fell short. Zoe was delighted that team members came up with creative solutions to problems that did not fall under their purview.
As the year progressed, it became readily apparent if a team member, despite additional coaching, training, and support, consistently failed to meet the objective. This compelled her to take necessary but difficult action.
This year, Zoe’s work schedule was one of the most significant adjustments. She discovered that her team was more than willing to call her out when she wasted time on unimportant duties. Different team members took on the tasks she detested (and frequently avoided). She acknowledged that her team was significantly superior (and more efficient) at performing these duties.
She finally had the time and energy to work “on” the business as opposed to “in” it. The majority of the time, she looked forward to going to the office, and on her days off, she was genuinely unplugged. Zoe enthusiastically shared that she was on her way to ask her star team member to be the general manager of the new location as she exited the door.
6. Coach, Do Not Inform! Master coaching and financial analysis competencies
As you reflect on Zoe’s success, you realize that the time you spent cultivating strong coaching skills and mastering a crucial financial analysis skill such as Breakeven PLUS paid off in terms of your effectiveness. You helped Zoe “own” her solutions by asking potent questions and being an inquisitive, open-minded collaborator (rather than a subject matter expert). This helped her clarify her intended outcomes and maintain her focus on her objectives. As it turns out, the ASBDC 2023 PreCon workshop, Level Up Your Financial Coaching: Profitable Growth from Day One, generated a substantial return on investment for you and the business community you serve so passionately.