The first step to Financial Stability – Declutter your business priorities
As many of us are stuck at home with spare time on our hands during lockdown, we’re taking advantage of the opportunity to declutter our homes – and now is a great moment to do the same for your business priorities.
By taking a little time to step back and understand what’s really important, just as you would for the items that are filling up your home, you can find a path towards delivering long-term financial stability for your business in spite of the tough times many of us are experiencing.
So how to get started and ensure you’re focusing on what really matters?
If you’re an FD or CFO trying to set your company on an even keel, taking a broader view to understand your business challenges can be an important first step. “We need to know what matters most in order to know the starting point,” says Raymond Holt, a business coach who is founder of Agnentis Partners and a former FD himself. “As the challenges we often experience are not solely finance, but are business challenges, it’s important to take your thinking up to the highest level possible.”
In order to do that, he recommends using a simple matrix to help examine – and declutter – any issues you’re facing, to understand which ones really matter, and which ones don’t.
By listing your challenges in order of urgency against how long it could take to solve them, while also taking into account the impact they are likely to have, you can start to see a way ahead.
“What you should be looking for,” he says, “is to articulate the primary issue that, when resolved, will put the business in the position you want it to be. Then it’s the urgency and complexity of the challenge that’s ahead, against the timeframe to resolve it, which will determine what actions you follow from here.”
Failing to work out what is truly urgent and what is less important can lead to a crippling lack of focus, Raymond continues. He therefore also recommends using this simple chart to prioritise the actions you take:
“A lot of the time I see businesses that are unable to clarify the difference between what needs to be done now and what can be done later. That messes up their ability to allocate time and resources to the most important things. So you must look at what really is the bottleneck that’s causing that problem – and apply all available resources to fixing that.”
Atif Hasan, CFO at August Leadership, a global executive search firm, also believes this approach can help leaders to make tough decisions. “As soon as you can declutter your issues, your effort becomes focused,” he says. “And that’s very important when it comes to things that you feel you must have – you must always reference them against the question: ‘Is that really solving the problem that is most affecting my business?’
“If it’s not, just drop it. You have to be brutal about it – and I use the word brutal deliberately, because it has to be without emotion, as that is one of the things that affects decision-making in SMEs.”
One further technique that can help, say Raymond and Atif, is undertaking a simple ‘abundance assessment’, to help you understand where you might need additional support. This requires rating five key resources – cash, time, skills, people and energy – according to whether you have more or less than you need, or just the right amount, to achieve the prioritised actions you’ve already set out.
“This will give you a holistic view of resources,” says Raymond, “and let you utilise the ones that you have in order to most effectively resolve your challenges.”
It also enables you to identify the gaps where you might need external support, he adds. For example, an abundance of cash but a lack of skills, time and/or people might lead you to call in a third-party consultancy.
Atif agrees, and also points to the importance of energy – particularly in the tough business climate that so many companies are facing. “Right now, a big challenge for a business is what energy is there to make changes and move forwards?” he says.
He also explains the strong link between skills and energy. “When you don’t have sufficient skills, you often find you’re pedalling too hard and you lose energy,” he says. “So it’s important to bring someone else in, to allow them to carry some of the burden and bring in some additional energy through their skills and experience.”
But the most important thing, Raymond and Atif agree, is just getting started in the right direction. “We get so hooked on wanting to get to the top of the mountain without first putting the backpack on our back and taking a first step forwards,” says Raymond.
“And that,” says Atif, “is why understanding the context, and decluttering the priorities, are so important.”
One important way to give yourself the thinking space – and essential data – to be able to do all of the above is to ensure you have the right software solutions in place, as well as optimum processes around it. Here at Cognition24 we’d love to talk to you about how we can help with all this, so get in touch, or read about Financial Stability: Getting the help you need here.