NCET helps you explore business and technology
By Peter Williamson
Business success is often measured by size attributes: revenue, number of employees, geographic coverage, growth rates etc. But these measures don’t reflect the functional development of the business – in other words, just how strong is the business, really? Is it able to grow sustainably? Are there opportunities to execute more profitably? Are there critical dependencies that are risks or limitations for the business?
Answering these questions requires a framework for thinking about how a business is actually doing, such as this 6-level model.
Level 1 – Mastery: This level is basic viability and has four components – Delivery, Financial, Destination and Time. Delivery looks at providing consistent delivery of product or service. Financial is simply commercial viability – is the business a financially viable enterprise? Destination is all about clarity of direction – having clear goals that guide the business forward. And Time is critical – does the leadership have the bandwidth to improve the business?
Level 2 – Niche: Niche level is all about establishing consistent positive cash flow. Cash is the lifeblood of any business. The Niche level focuses on putting the marketing and sales systems in place that enable the business to predictably achieve a positive ROI on marketing spend. If every dollar spent on marketing can generate profits predictably, then marketing becomes an investment to manage and grow the business instead of an expense to control.
Level 3 – Leverage: Growth and especially high growth challenge the business’ ability to scale while continuing to provide excellent Delivery and Financial performance. Systems are the key here and are the core of the Leverage level. Systems are the framework that allows the business to design the work once and execute it reproducibly, consistently and efficiently.
Level 4 – Team: The Team level is an especially critical level in today’s low unemployment environment. Too often the hiring environment gets blamed for personnel problems. Success at the Team level comprises both getting the right employees and providing the combination of leadership, culture, direction, management and opportunity to ensure that they and the business both thrive.
Level 5 – Synergy: Once levels 1-4 are in place, it’s time to test how the business will handle additional growth – at all levels. What works as the company scales? What breaks down or needs to be enhanced?
Level 6 – Results: The Results Level is about mapping the next steps for the business – are there new geographies, new products or services, even a merger or an acquisition that will further enhance the business?
If you find yourself running into challenges with your business – e.g. inconsistent profitability, employee turnover, issues with your product or service, struggles with scaling up to meet customer requirements or just overwhelming demands on your time — this framework can help you understand where to focus your efforts.
Peter Williamson is Business Coach and Master Licensee at ActionCOACH (actioncoach.com) and NCET’s VP of Tech Wednesday. NCET is a member-supported non-profit that produces educational and networking events to help people explore businesses and technology.