Good Information Can Help You Make Good Decisions
Many years ago I had the opportunity of hiring a talented and caring chief financial officer by the name of Garry Carter, CPA who during the interview process said to me, “Brad I’ll give you good information, and I’ll trust that you will make good decisions.” I learned quite a bit from Garry over the years, and I credit much of my success today to his mentoring.
The following are a few points I would like to make that I believe help entrepreneurial firms grow faster, smarter and—most importantly—more profitably. First and foremost, I think it is important to stop “guessing” and start “knowing.” Having great leadership decision-making strategies and good data gives you the ability analyze your business in a way that gives you great confidence in your decisions. Strategic decision-making empowers leaders to act with clarity and purpose.
Use Key Data to Improve Business Decisions
Organizing the data provides an opportunity for your people to understand your business results and to know what actions to take for improvement. Preparing your financials and your key performance indicators in a graphical fashion makes it much easier for the non-financial manager to read and understand. In turn, that provides a basis for your people to more accurately act on the data. Preparing a graph particularly helps people see the data in a different light and understand it better. It is one thing to present the data, and it is another for people to be able to understand the data. We are looking for understanding and appropriate action.
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Visualize Your Results for Strategic Decision-Making
Additionally, I am a very large proponent of preparing your financial statements and reports in a trailing twelve-month format as it provides a positive element in your reporting. This format removes seasonality, meaning you’re always looking at a whole year. In order for the graph to tick up, you would have to have the current month performing better than it did for the same period one year ago. Basically, the same month must to perform better than it was in the previous year. When you achieve that graphically, your people begin to see that up is good and down is bad -- simple and clear. You remove the ups and downs of seasonality, and you get a very good indication of how a business is performing.
By implementing effective leadership skills and improving your decision-making framework, you set your business up for success with confidence and precision.
Better Decisions Build a Better Business
Great business decision-making processes help you make better decisions and avoid poor ones. A series of great decisions helps you make a great business. Whether you are analyzing key performance indicators or developing a leadership decision-making framework, good data will always guide you toward the right actions.
Related: How to Stay Motivated Leading Your Business
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