Week 13 Recap: Putting it all together
Celso Fernández Llorens
Helping Business Owners scale their operations for profit and cash flow |Business Operations Mentor @ESADE |Engineering Director, Northvolt |
This edition is a recap of all the last 12 editions.
I created it with the aim to capture the lessons and connect the dots.
I believe is a nice way to see all the concepts connected to get a better picture and easier application of what I shared up to now.
Here we go.
THINK IN SYSTEMS
If you only need to take something from what I share is this:
Businesses are systems. And as such, you need to look at them in a global way.
Businesses are not isolated elements, are components that work together. One affects the other.
Sales decisions affect operations.
Changes in engineering affect production.
Problems in accounts payable affect purchasing, and engineering.
You get the point.
Trying to locally optimize is a waste of time and energy.
Find the main problems on your company, and make it a joint effort to solve them.
Usually what stops companies from progressing is a few things, not 1000.
And you don′t have endless resources.
Those constraints should be your focus.
Make sure also that you generate Win together / Loose together situations. You want your team to work as one, not isolated kingdoms working one against each other.
People is what makes your company alive. Make sure you have that in mind, and work to get the best talent, working at their best.
You can find the specific newsletters here:
FOCUS ON VALUE
All your company should understand how the company delivers value, what is that value and to whom.
Fail to do that and you will have many initiatives, just not aligned, therefore working in different directions.
You need to make an effort to align what the customers need/value with what the company needs/values.
When you do this right, it would be much easier to quote new projects, to define strategies, to align the teams....
You can find the specific newsletter here:
USE FINANCES AS A TOOL
Finances are the ultimate performance tool.
You can do whatever you want, but at the end of the day, finances will tell you if you did a great, good, bad or horrible job.
The thing is that you should use the finance metrics to take decisions, and to drive actions. It is not a mere reporting tool.
And from all of those reports, my recommendation is to prioritize cash-flow first.
By prioritizing cash-flow and having good control over it, you will definitely control your profit, and you will end up with a healthy balance.
Don′t do it the other way around.
Finally, the game here is: how much money can we generate while loosing as minimal as possible?
We tend to generate endless metrics to drive things forward, but sometimes by doing that, we lose sight on what we are trying to achieve.
领英推荐
You have a business, mainly because you want to generate money (and hopefully, with that enable a vision).
You can find the specific newsletters here
USE THE PROPER BRIDGE METRICS
Finance metrics are the ultimate performance metrics.
That being said, for the sake of simplicity and to be able to sort things out on the shop-floor you need bridge metrics. Metrics that connect the financial metrics with the everyday tasks.
You just need 3: Throughput, Investment (considering inventory inside this bucket), Operational Expenses.
One to measure the money being generated and coming into the business.
One to measure the money stuck in the business.
One to measure the outflows of money.
That's it.
Do this right, and you will be in a better position to identify problems and opportunities.
And by doing this, you will also see something interesting.
First, that inventory is not your friend. It is not an asset, is a liability.
That costs is a word that has multiple meanings, and as such, dangerous.
Taking decisions based on "costs" can get you in trouble.
That's why you need to use operational expenses.
And this will lead you to look at your business, your system in a completely different way.
You will care, a lot, when your bottleneck stops.
You will not stress, when a non-bottleneck stops.
You will focus on the right and important things.
You will remove the noise from the signal.
Specific newsletters about the topic:
FINAL NOTES
I hope this edition helps navigating my content up to now.
And at the same time that you can use it for future reference if needed.
I would also like to encourage you to reach me if you want some support.
Writing in LinkedIn has been a way for me to share my ways of thinking and knowledge, but also a way to connect with fantastic individuals.
Some of them helped me progress and run some projects forward.
So feel free to reach me out if you feel I can support.
Thanks for reading me!
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10 个月Your advice for businesses is pure gold Celso Fernández Llorens!
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10 个月Subscribed so will digest and feed back!!
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10 个月Great lessons learned - at least theoretically. Now, it's time to tackle it in the real world of my business. I feel slight overwhelm, but as you said - it's a few things, not 1000 Celso Fernández Llorens
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10 个月Thanks Celso Fernández Llorens for the series information which help us to see process from a new aspect
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10 个月Comprehensive consolidation of the key principles and insights shared across your previous editions. Like it.