Knowing the difference will greatly enable your company valuation
We often hear business owners and CEO’s talk about how busy their teams are. Certainly, there are many reasons for this, some good, some not so good. The question that should come to mind is, does your team know the difference between motion and progress?
Motion is people doing lots of things. Progress is people doing the right things that are enabling your business to hit desired performance targets. Here are some great questions you should ask yourself and your team to ensure you’re not confusing motion for progress:
- Do we have KPI’s in place that we monitor to determine whether our efforts are leading to desired results?
- Do we achieve the goals we set? If not, why not as you will clearly want to understand the underlying issues that need to be addressed.
- When is the last time you reviewed key processes in your business to determine which ones are still effective and efficient and which might be outdated? With my businesses over the years, we would look at labor hours across all functional areas to see where the majority were being applied and ask ourselves if those hours were linked to our strategy and linked to driving progress? We would often find an outdated process that was consuming non-value added human resources and had to be redesigned.
- Are your reward systems for employees based on motion or progress? In looking at any incentive plans, do they reward progress or do you just reward people working hard regardless of outcome?
- As you observe your facility (office and/or production areas), do you see a lot of people walking around or do you see people focused? I say to business owners and CEO’s, imagine yourself tearing back the roof of your facility and just observing the movement of your people. Does it look like the movement is related to progress and results you desire or does it appear to be a lot of non-value added movement?
Bottom line is this. Businesses that one day look to sell will command a far greater exit valuation by having activities and efforts of their team linked to driving progress. No one will reward motion, only progress.
