Most business owners are involved in all aspects of their business and know every small thing in their business. That’s like knowing the wood or in other words, knowing all trees intimately in a jungle. That’s why most business owners get flummoxed when told that they should conduct reviews. The typical response being, why do I need reviews when I already know everything in my business?
A review allows us an opportunity to detach ourselves from the business and look at it from a distance. While engaged in day to day operations, we are getting a 30 feet view of our business, a review helps us step backward and get a 30,000 feet view of our business. We are able to see the forest instead of trees. Hence we get a more holistic view of our business. For example, how our credit policy is affecting not only our sales but also our cash flow.
Periodic Reviews also help us gauge scale of movement and hence provide inputs in planning course correction(s) and in gauging impact of new initiative(s). For example, how costs have changed in last few years.
A review would typically start with a comparison. Mostly it is comparison of budget vs actuals. The review could also be a comparison of performance in current period with that of a past period. Most organizations use budget vs actuals for reviews. This helps them gauge progress against plan. It also allows companies to revisit assumptions that they made in their plans. The assumptions could be related to any aspect of sales or costs. For example, percentage bids won or lost, number of inquiries generated or average order size. This allows companies to revise their assumptions and make course corrections.
Good planning processes and reviews allow managers to zero in on problem areas and move from 30,000 feet to 30 feet. This reduces there day to day involvement in operations and allows them to delegate.
Given the importance of reviews, it is important that they are conducted in a friendly and positive atmosphere, are scheduled on regular periodic intervals. Most importantly, they should be structured in a way that they help us learn and take action.
Some ground rules for review meeting
- Psychological safety – for a meaningful review, it is important that employees feel comfortable in speaking up. It is important that employer provides a psychological safety. As Amy Edmondson, Professor at Harvard says, “Psychological safety is a belief that one will not be punished or humiliated for speaking up with ideas, questions, concerns or mistakes.”
- Everyone has equal voice. Everyone can raise an issue and respond to an issue. Listen with an open mind and remember that everyone’s experience is valid.
- Don’t make it personal, don’t take it personally.
- Avoid blame game. Take learnings and think of improvements. Look forward and Think Positive
Structure of reviews
It is necessary to ask three questions in reviews
1 . What has worked for us? What is it that we need to do more?
- What did not work for us? What is that we should change or avoid doing?
- What should be next steps? What should be our action plan with time frame?
Plan and review. Your business will go places.