MBE - the business secret used by the most effective business leaders

Sir Richard Branson, when spending time with family limits his 'business' time to 15 minutes per day, prompting one journalist to ask "How do you manage to stay on top of a multi-billion dollar global enterprise in just 15 minutes?" And his response? "Make every second count!"

This got me thinking. Too many of us mere business mortals spend too much time, too often on stuff that isn't adding value - we don't make every second count.

The key, therefore is to figure out what stuff adds value and measure it, and equally importantly, figure out what's not adding value and stop spending time on it.

I'm reminded of the Hedgehog Concept of business as presented in Jim Collin's great book, 'Good to Great'. Here's my take on the concept from my own (great :-) ) book, Feeding Johnny:

Watch the video or read on below for more...

"..., the hedgehog is the best in the world at – being a hedgehog. He knows what he’s about. He knows what he’s not about. He doesn’t try to be something he can never be...

The Hedgehog Concept of business asks us to ask ourselves three important questions about what we are doing.

1. Can you be the best in the world at it?

Now, the world, when you begin a business, may simply be the area you live in, your town or county, or perhaps the region of the country, but of course, some businesses today are ‘born global’ i.e. an online business with immediate global reach in terms of delivering its product or service. Regardless, you are being asked can you be the BEST IN THE WORLD at it? Not – can you be as good as yer man down the road who you’re planning to copy? The Hedgehog has high standards.

2. Are you passionate about it?

If you’re not, don’t start. It really will be too much work. Stay as an employee. Regardless of how hard you think you are working for your boss, you will work markedly harder when you are working in your own business.

3. What drives your economic engine?

... at some point you will have to identify ... information, the measurement of which will satisfy you that your business is in good health."

It is this piece that I want to focus on today; what drives your economic engine?

In this day and age, information is everywhere, in fact, we are drowning in it. Big Business uses Big Data to analyse, break apart, put back together and utilize information to make better, more informed business decisions. But what if you are a solopreneur, or an SME? What then?

Well I believe you need to simplify your business data down to a handful of key elements, elements that when measured regularly, give you an accurate state of play of your business, without consuming vast amounts of time (your time, or others in the organisation).

In Carambola we apply an MBE approach to the weekly measurement of our business to ensure it is healthy and sustainable.

MBE stands for 'Manage by Exception' and it means exactly that - only manage the things that are not working according to plan - if something is working according to plan, forget about it, move on quickly to those areas that are not working according to plan (the exceptions) and spend time fixing them so that next week you do better, confident in the knowledge that once you fix something, another thing will pop up demanding your attention.

That's what Sir Richard means when he says he makes every second of his 15 minutes count. He Manages by Exception.

A few tips:

• Manage weekly - the week is the perfect patch in the fabric of life - if the week, works, the month, quarter and year are on track. If it doesn't, they're not.
• Review early in the week. We do it on Monday. This allows us figure out what's off track (up to close of business in the week just finished) and affords us the opportunity to fix it LIVE, in the week we have just begun so we don't repeat the mistake.
• Only measure vital data: clearly this includes sales - are sales on track, if yes, move on, if no, ask why? ask how do we fix that THIS week?
• Vital data likely includes significant variable costs: in the case of Carambola, this includes food and packaging, direct labour, and transport costs so these get special attention - to a large extent everything under these in the p&l is fixed and therefore not worth spending operational time on at a weekly meeting - the rent is the rent, the lighting bill is largely fixed, the accountants fees are what they are, don't worry about them until year end.
• Define the contribution required. ie that number that once achieved guarantees your fixed costs are covered so you can sleep easy and measure those variable costs above that contribution line because these are likely the only things you can exert any real influence over week to week.
• Measure complaints. Yes, you heard me. The people who tell you you're great aren't really helping, the ones that said, this week you sucked at x, y or z are worth listening to so you can identify a pattern and fix the real problems rather than knee-jerking to every beat of a negative clients drum.
• Measure your clients on a risk register:

Risk score 1; no risk (don't discuss them),

Risk score 3; somewhat at risk, maybe they're just difficult, maybe they have niggles with your organisation but they are scored a 3 because they need special attention. Objective: How do we we get these to a 1?

Risk score 5; definitely at risk. If you don't do something positive to affect the relationship, these will defect to the competition this year - measure, discuss, plan, act. Objective: How do we we get these to a 3?

In simple terms only measure exceptions - those areas over which you can exercise some control THIS week that are currently adrift of your norm.

Sort the week, the rest will follow.

END.

MORE: If you enjoyed that and would like to read/watch my Blog/Vlog on THe Hedgehog Concept of Business – click here.

FREE AUDIO BOOK: If would like a complimentary copy of 'Feeding Johnny - How to Build a Business Despite the Roadblocks' in audio, narrated by yours truly so you get all the nuances, feel free to grab one here.

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Thanks for thinking with me.

Yours truly,

Colm