Useful Reports can drive good decisions and lead to profitable actions!
Apply these 4 easy steps and upgrade your reports to be more useful …
Most business reports simply provide numbers, numbers and more numbers! These reports are designed to be a print-out of this period’s data… Sometimes, the better ones have a bit of an explanation about how this mass of numbers are different from the last….This month we have 5 red beans and 6 blue, last month there were 10 blue and 3 red!
“What does this mean?” coupled with a “please go and investigate further”….
This creates two problems, firstly management time is wasted having to revisit the answer and secondly, while accounts investigate, the timeliness of relevant decisions and actions leaches away – sometimes critically!
By viewing reports as decision-making tools, rather than data summaries, the Results Review focus changes to Required Outcomes and Next Steps.
Here is how to get started on making useful reports:
- STEP 1 – CONFIRM THE GOALS
Having a report for your own team, project, or area can be useful; but not nearly as powerful as one that is aligned directly with the organization’s overall objectives. If you want to make your decisions have true impact consider how each is in alignment with these objectives. To do this often requires you to revisit (or distill)
your business mission and objectives document. Also know as the business plan, it doesn’t have to be more than a page. For Smaller Firms – don’t put this off because you think it will take too long, or is too hard …write down what you do, and why, plus 5 things you are working to achieve… For larger firms – this is a bigger job: the entrepreneurial team should take this opportunity to make sure all of the founders are literally on the same page and roll the alignment down through any departments, divisions and layers – checking and adjusting where necessary.
Either way, once the goals are clear circulate them with everyone who makes decisions – and confirm they are on the same page.
All this goal alignment work should filter out which few key decisions YOU need to be making each month – ie what activities you need to focus on to achieve the business goals AND your goals.
- STEP 2 – GET INVOLVED
Your reports are a key tool to help you to make decisions! Reports are not there to keep your accountant busy, nor to show the fab ways excel can create a graph….What measures and data will help YOU make better decisions (and what can be removed as it doesn’t help at all)? When you are handed a pro-forma monthly list of stable metrics tracking along – consider if that is what you need to make the right decisions per Step 1. Then get involved to get what YOU need by checking:
a) How is this information related to something YOU CAN influence – can your actions affect this measure in any way? If your data comes from outside, or unknown sources, then you won’t be able to make changes to influence that data. If this is the case then follow up with
b) How is this information related to something YOU SHOULD influence – you may not be able to impact your report, but you may need to react accordingly – eg the GFC was well outside Australian’s realm of influence, yet discretionary spending has been decreased in line with reducing profits. If there is no correlation between the data and your business decisions cull your report.
c) Do you have information on the right things, a mix of things, or the wrong things entirely (which can cause unintended activities and behaviours). Get a mix! e.g. If you are looking at saving costs and all your measures reflect that, then growth through marketing and development can become a casualty – ensure that your measures are in line with what is right for the business as a whole as well as your own areas. - STEP 3 – KNOW WHEN TO ACT
“Watching” is a Decision – but doesn’t require any further Actions – For each measure on your reports clear boundaries for action should be set, communicated and re-inforced regularly. XXX is the upper boundary YYY is the lower boundary and if the data falls outside of this these are the action steps needed… - STEP 4 – KEEP A DECISION & ACTION REGISTER
When you couple a report with a corrective action tool, such as an Action Register, you multiply your report’s usefulness. By implementing a process to identify performance issues, assign corrective actions, and then track action follow through you empower your team to directly affect results as aligned with the mission..
Remember – WATCHING is a DECISION and should be recorded in the register… This also creates a fabulous record from a compliance and legal stand-point.
In the end running a business boils down to these very simple steps:
- Decide the business Purposes and Goals: Setting the strategy, planning, missions objectives and targets of the business…
- Establish where you are Now: Assessment & Analysis; reports on current status can also include analysis and comparison against where you want to be and info on where you came from…
- Take Action to get to where you Want To Go: Decisions and Actions made about what to do and when and how to get to where you want to be!
How are your reports used for decision and action?
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Every Report should drive good decisions
Building a good report also takes some skill – this post covers off how to give a report good structure.3 Keys to Simple Business Reports
