Do you really know what is going on in your business in a way that helps improve performance and also meets the Regulator’s expectations?
As a business owner, or a director responsible to the owners for the performance of the business, you have a duty to take reasonable steps to ensure that the business is meeting its financial, customer, regulatory and supplier obligations - both today and into the future.
These obligations are no less keen if you are a small, medium or large business - it is just the scale and complexity that will be different.
To many, this will be a matter of smoothly following good-business practice, but to others, it may seem a chore and something difficult to fit in with client work.
When you are a captain with your own skills and performance to consider, it is easy to forget you are also responsible for the team’s performance!
But how do you do that? What can you do to introduce this self-discipline into your business?
There are five key steps that will help any business owner improve their knowledge about what is really happening in the business, and the control that enables them to make changes when needed:
- Establish a ‘regular’ (from 1 to 12 times a year) board meeting for owners/directors with an agreed schedule of dates set out and secured in diaries
- Set up an agenda of regular items with room for ad hoc issues
- Ensure a standard set of management information is available in advance for discussion and challenge.
- Minute the meetings, noting any agreed actions. These should be reviewed at subsequent meetings to ensure follow-through has taken place
- Look to introduce an independent challenge
Larger, and in particular, ‘listed’ businesses will do this as a matter of course and they are also likely to have appointed Non-Executive Directors (NEDs) to challenge the executive team and ensure the business operates as its shareholders and the law expects.
NEDs tend to be in place to represent the interests of shareholders and ensure that the business is running well today and has a strategy to meet tomorrow’s world.
But what about the smaller businesses with owner-directors, or with a smaller number of working directors and private shareholders?
How do they put into place the disciplines that enable them to understand current performance, to discuss and take action to improve the weaker areas of performance and to plan for the future?
Of course, it is easy for you to say, “I do that already”, but be aware that regulators expect every authorised firm to have some sort of independent challenge to its activities at board or partner level.
In my experience, having bitten the bullet of introducing this independent challenge, many insurance broking businesses benefit enormously from external independent challenge and support.
When I am asked to perform a quasi-NED role for clients, I work with the client to develop a standing agenda, to ensure minutes are kept and reviewed and, most importantly of all, ensure there is discussion about current and future performance across all critical aspects of the business (financial, regulatory, client and staff). I document the decisions that are taken and actions agreed that will address any areas of weakness; coaching is a big part of my time.
External involvement will help bring discipline to the process and constructive challenge to the way the business works. With an experienced business person, it will also bring new ideas and different experiences into discussions.
Choose well, and you will benefit from improved business performance - growth, profit and share value.
Business owners need to take regular time out to review the performance of their business and plan to meet the challenges of the future.
Often, captains are too busy kicking the ball around with the team, not focusing on the overall game, and not acting with the self -discipline required to win on a regular basis and against all opposition.
Being successful does not always mean winning the league, but relegation is always a failure.