Having a CFO as part of your Management Team is one key piece of advice we often give to Design Services companies that we support. We do this as part of a short, focused project, (for example customer strategy) or sometimes as a longer service project (for instance as part of an R&D project). One other piece of advice that we almost always give is the need for an external board while executing the company’s strategy.
It is interesting to note that a significant number of (design services) companies we encounter do not run a regular (formal) review of their progress. We consider these reviews critical as it allows for an external set of eyes to evaluate the company’s progress along its earlier defined ambition and strategy. Internal reviews are of course done, usually as a monthly sales meeting, relevant project status meetings or an MT strategy meeting but these meetings tend to be exactly that: an internal review carried out by the very same people executing it. This often leads to a more or less artificial decision process where the key stakeholders need to make judgement calls, they already make during their regular activities.
Instead, we favor the so-called Quarterly Business Review (QBR) process. Regular corporates have these more or less institutionalized: the QBR is run by the management team of the business unit while corporate management (and often external Board members) provides the “review component”.
It is important to realize that design services companies which are usually bootstrapped, sometimes in combination with a bank loan, do not have either Board or investors that check the execution of business plans, product delivery and overall ambition and strategy progress. Establishing a QBR process with an external review component is critical for a balanced review and timely discussion.
The next fundamental question is: what is being reviewed as part of a QBR? Of course, for the regular corporates it is all about the business performance: sales forecast, sales funnel and closed deals, product delivery, competition etc. For a design services company, and certainly an early-stage or growth company, there are more things to track and discuss. For this purpose, we have developed a dashboard composed of a strategic view, a tactical view, and a topical view. Each view holds several components which track specific developments. Tactical will typically focus on the KPIs and strategic on the KRIs. Usually, we extract the components for the different views out of our Discovery process. Of course, a number of these are familiar and appear in one form or another in monthly and/or yearly reports. Usually, the tactical view is relatively complete. Often missing are the long-term tracking of the ambitions (the compass) and the specific topical challenges that make each company different. An example of a set of topical trackers is given underneath. Once a solid dashboard is established, the QBR meeting itself can focus on the topics most relevant to the company and its Management Team. A good dashboard ensures all people involved, internally and externally, have a clear view of the status and progress of the company.
We’ll provide a separate discussion track, covering the specific parts of the dashboard and their use.
Includes image by freepik
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At a later stage we will provide a series of postings on how to build and maintain your company’s dashboard. Most importantly, we cover how to use it. The most eloquent dashboard does no good if it is not properly used.
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