The Psychology of Organisations…….

I have been working quite a bit with banks, the public sector and some large corporate businesses recently. These experiences provided an insight that I thought you might also be interested in. These organisations all had a strategy (of sorts….) processes, controls, KPI’s and policies, the usual stuff. The bit the majority do not get is that success seems to come from nurturing the spirit and soul of the business.

The pride that people share in working in an organisation that produces results beyond expectations consistently. The pride the Australian cricket team get from wearing their baggies (green caps) or my favourite client Keepmoat who are obsessed with becoming a billion pound business – 10 times growth in a very short period.

I see it in people’s eyes…..the passion, the pride and the commitment to the shared goals. It’s not about bonuses, job titles, egos or fancy cars; it’s about a shared purpose which people genuinely believe in.

Most large organisations in my experience really struggle to understand this so they try to buy it through over-generous salaries and bonuses (banks) plus fear – “We get rid of the bottom 10% every year” (corporates) or rules and policies (public sector).

So Mr Cameron and business bosses, put the psychology of the organisation on your agenda if you really want to improve the performance of UK Plc. Make it a priority to nurture the pride and soul of your organisations……the skill to do this is called LEADERSHIP.

Top Tip for Tough Times

When business gets tough there is a natural tendency to focus inwardly, worry, cut costs, batten down the hatches and hope......

In fact, in tough times business people should get out of their offices and spend as much time with customers as possible. In difficult periods customers also experience problems which you can help to solve:

Customer Problems = Your Opportunities

Common sense? Obvious? What are you doing right now?

Get a Grip - Part 2

In the last blog we promised to share the six key indicators small businesses need to monitor and manage in order to sleep easy in their beds. So here goes:

1. Sales vs plan
2. Gross margin as % of sales
3. Break even %
4. Debtors as % of sales or days
5. Creditors as % of sales or days
6. Working capital available or cash

Track and trend these monthly and you will manage 90% of the key numbers in your business.

Get a Grip

Calling all Small Businesses

90% of small businesses are out of control financially....fact!

They do not sleep easy in their beds and if they do they must be either self deluded, drunk or mad!

So get a grip by hiring somebody who can add up to do your monthly accounts accurately. Then ask them to track and trend the six key indicators.

Find out what they are in my next blog.

So follow this advice and sleep easy in your bed.....

There, financial control for SMEs... done!