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Management
by Steve Rucinski on August 22, 2006

For many managers the use of the monthly financial statement and the sales backlog are their only yardstick or indicators of how they are doing. This alone won't provide a lot of answers as to where you are CURRENTLY or where you are headed, because this is only the financial picture. Important? Yes, but this is only part of the entire business picture. Waiting for month end reports can sometimes take too long and even then may not provide much insight. Many companies today also use operating ratio's to better determine their finances and cash situations. This information helps but is also usually five to six weeks old or even longer for many companies. But the idea of using a number to measure financial change, keeps it simple and easily understood.
There are indicators or numbers that you can develop from the list below that will provide a more timely pulse on your business. It shouldn't be difficult or require any significant amount of time to generate the data because it probably already exists somewhere or is simply in another format.
Indicators and Warning Signs:
Changes being made without a plan
Increased customer product complaints
Deterioration in facilities
Higher product failure/rejection rate
Projects falling behind
Employee morale changes
Repeat business declines
Uncontrolled expansion or growth
Customers leaving
Competitors taking business
Costs are increasing
Stress increases
Technology change in the industry not noticed
Good employees are quitting
Aged accounts receivable increasing
Decline in advertising and promotion
Increased lead-times
Revenue is falling
Market share loss
Non product customer complaints
Output ratio per person (sales/units-production and total)
Most key managers should be able to provide short term insights into all or most of these items that fall within their areas of responsibility. Some of these can be measured on a daily basis and others less infrequently, but they can tell a story over time that will help you to take remedial steps and keep your business running more smoothly.
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