Merry Christmas and Happy New Year everyone. I hope you are having as great break from work. I know that I am.
As 2023 gradually recedes into the past, we should take time to reflect on where we want to be in 2024. We know there will be challenges and uncertainty, and the world we live in is experiencing a range of economic problems, regional conflicts, and government policy changes. We know that the cost of living is escalating, some caused by inflation, energy prices, supply chain constraints, productivity performance stagnation and weather-related disasters. Knowing these will be prominent in 2024, we should take the time to reflect on what we did well in 2023, and where we can improve in 2024. As most industry sectors will be starting to conduct performance reviews for the last 6 months of the financial year, what should we be looking for to assess performance. My suggestions are:
- Review financial performance and KPI’s over tome and against your peers. We know that there is a significant spread between the best and worst performers, and understanding where we sit will provide us with an understanding of our competitiveness. This competitiveness will be critical to weathering any future economic storm.
- Review your operational performance. Are you maximising the output from your equipment other assets. This is reflected in how efficient your utilisation of your business resources (it includes staff, machinery, buildings, governance, and decision-making resources) is and directly relates to productivity.
- Do you utilise third party advice and support. Having access and using your networks to understand your current marketplace and potential impacts on these markets if forces outside of our control suddenly shifts your ability to maintain cashflow.
All of the above will assist in reducing the possibility of business stress. Understanding that of the 11,000 business that went into receivership over the past 12 months, the three big causes of business failure include:
- Lack of Cashflow
- Financial Mismanagement, and
- Lack of Strategic planning
These three causes figure prominently as the top three for the past decade, and only change their ranking. By reviewing financial and operational performance and obtain third party support to assist in developing a strategic approach to decision-making, it will reduce the risk of becoming a statistic.
If you have any concerns and wish to review performance, there are a number of avenues to address some of the potential issues. The Institute of Management Consultants (IMC) have a database of qualified consultants, and I am always available for a discussion (john@ctocsolutions.com.au).
Anyway, enough said, look after yourself over the festive season and good luck for 2024.
John
