There are three things a CEO must do every day.
1.) Listen to your customers
2.) Talk with your employees
3.) Read Your Reports
I've blogged separately about the first one, it's importance and slight priority over talking with your employees. Let's talk about the third one:
Read Your Reports
That directive has the tone of 'eat your vegetables'. There's a corollary. Your health is in your vegetables. Your company's health is in your reports. Both are insights of the obvious kind.
Yet, if it's so obvious, why do so many companies ignore their reports? Or use the wrong reports. (and why don't we eat our vegetables, but let's focus on the reports). Here are a few reasons:
- Reports are boring (Yes and no. They tell a story in a special language.)
- Entrepreneurs personalities are strong on the spatial skills to create a vision. And less strong on analytic skills.
- Reports always create more work. (That's their point.)
- Reports rarely create celebrations. (That's your fault, if you're the CEO.)
Reading reports daily is as important as talking daily with your customers and employees. The results of those conversations, conversations with your employees and customers, should be quantified in your reports. Their stories of talking with your company, and you with them, should find a numerical equivalent in your reports.
To help anyone reach this goal, I've included my list of reports that quantified my success as CEO of a small company. The point here is to manage the deluge of critical data for your company in a way that lets you act on the information immediately.
Each day I reviewed at least one of these reports. I didn't review each of these daily. But I did look at one of them daily. I reviewed them daily for clues, hints, their equivalent as road signs ... to see where we were headed.
Inbound and outbound sales calls - month
- per sales agent
New customers, month to month
- compare to previous periods
- Conversion Rate? (very important)
- Timeline? How long does a prospect need to make up their mind. More time means we're not providing an immediate solution for their needs. Are we attracting prospects whose needs we can't meet? Are their new competitors? Is the market softening, and people are pinching their pennies.
- How many
- From whom
- Results, same as above
- Costs per prospect
- Costs per click (least important)
- Costs per new customer
- Revenue per new customer
- time spent
- which page
- what source
inbound customer service calls - month
- compare to previous periods
Net Promoter Scores
I regularly called customers and used The Ultimate Question Survey.
Sources and Uses of Cash - Monthly
EBITDA report (monthly, quarterly, annually)
- earnings before interest, taxes, depreciation and amortization
- It's how much cash you generated from your efforts to serve your customers and employees
This is more important for a small business than a Profit Report. Profit reports are the result of too many accounting rules to minimize exposure to taxes. Yes. It is important to minimize taxes. But, it's imperative you generate cash to sustain your business and maintain ownership (free from lenders, investors, financers, family,)
Nothing good happened on the occasions I failed to maintain this routine of reviewing these reports, daily.
TIME-SAVING TIP: Airplanes and airports are the perfect places to review reports. Make sure to include them in your laptop files. Here's why they are the best places:
- Minimal distractions are possible from phone or in-person meetings.
- I can't distract my staff, either. Too often, I'd misunderstand a number or the results they represented. I'd quickly pick up the phone to our accountant/Treasurer. Sometimes, the urgency I felt was justified. Sometimes, not. Either way, it was a distraction for this person.
- More in-depth understanding. Sitting in an airport, without the ability to have a 'quick' in-person, chat, means I have to write my questions down and wait...And this wait usually served to provide the answers I needed without interrupting anyone. It also gave me the time to have a deeper understanding of our results, where we're headed. And a new round of questions would start for net month's reports.
Eat your vegetables. Read your reports. You'll be happy, wealthy and wise.
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About the Author: Zane Safrit's passion is small business and the operations' excellence required to deliver a product that creates word-of-mouth, customer referrals and instills pride in those whose passion created it. He previously served as CEO of Conference Calls Unlimited. Zaneâ€™s blog can be found at Zane Safrit.