How is your company doing? To answer this question, a self-test has been developed to quickly see whether your company is in good shape or whether measures are needed.
- If a "yes" can be given to all questions, then the company has a grip on the most essential issues and is "in control.
- If one or at most two boxes check "no," these are definitely early warnings that should be put on the action list.
- Two "no" boxes are not yet cause for great concern, as long as it is addressed.
- If there are more negative signs in the list, then quick action with forceful action is in order. The situation is worrisome and chances are that (future) shareholders, financiers, commissioners and other external stakeholders will be reticent.
Strategy
With the company's strategy, it is crucial that it is clearly and currently formulated. Everyone in the company knows the strategy and applies it. It is also important that all decisions made serve the realization of the strategy. In other words, a strategy must not only be there, it must be conscientiously communicated and consistently executed.
Present & up to date? Yes/No
Communicated? Yes/No
Consistently Executed? Yes/No
Objectives
Has the strategy been translated into clear, consistent and measurable objectives. Does everyone in the company understand what the objectives are and are all objectives also aligned and reinforce each other? Nothing is more destructive than people who do their best, but whose efforts work against each other, or whose results are not easily measurable.
Clear? Yes/No
Consistent? Yes/No
Measurable? Yes/No
Cashflow
Although it sometimes seems that there is infinite money in the world, controlling cash flow is vital for any business. Especially even in the event that a higher cash-out than cash-in is anticipated in the short term. This starts with well-founded cash flow planning, combined with an adequate system to track it and predict and explain any deviations.
In order? Yes/No
To follow? Yes/No
To plan? Yes/No
Investment
Every company needs to invest, but in line with its strategy! It is therefore important that all investments are reviewed against this, but also that there is a medium-term investment plan showing that the necessary investments are financially sustainable and feasible. Also, the risks of each investment must be reasoned and financialized and the effects factored into the earnings forecast and cash flow forecast.
In line with strategy? Yes/No
Financially sustainable & feasible? Yes/No
Risks reasoned & (in)calculated? Yes/No
Management & Organization
Finally, we look at the quality of the management and set-up of the organization, starting with the CEO and his/her team. Are we dealing with a self-critical CEO (not a Sun King) and a strong and balanced management team? The closing audit questions concern the quality of the administration and management information. Is it adequate and relevant?
CEO is not a sun king or autocrat? Yes/No
Good Management Team? Yes/No
Good administration and management information? Yes/No
If you did answer "no" more than you thought, call in an expert because you need help with one business area or the entire business. Often, action is taken too late, let alone asking for outside help. Very often a successful next big step is possible, but something must first be done or handled differently.
Under such circumstances, an interim CEO or CFO brings vision, calm and stability. From the Interim Management practice of Mandaat and JBR, we use this list of questions to assess whether a company is 'in control'.
