Company Report Card, What Does Yours Look Like?

Today I was reflecting back on a company where I served as President and CEO. There were some difficult times and some incredibly successful times. I would have benefited from additional knowledge when I was asked to join as CEO, however, I think that could be said of any situation. As I reflected on the successes and failures I pulled out my objectives to review what I set out to accomplish. I pulled out a score card and gave myself a grade. Sure, I haven’t been at this company for many years, however, my initial objectives got my mind going.



I am about to engage in new venture and am asking myself many questions such as "what should be my primary objectives?", "what would be a measure of success (as measured by me as well as by my board of directors)?", and most importantly "what is my 90 day plan?". Sure, my list of five objectives is not unique to my prior company and I’m sure the same five objectives may exist for my new adventure. However, each situation is very different and the general goal can be made very specific to the situation.



What were my five goals? What did I put on my Report Card? Let’s take a look at each of them.



1. Increase revenue. Of course, this is always an objective. However, this company had flat revenue for the previous four quarters and there was some question as to the viability of the product in this particular market. Over the course of 18 months we were able to get revenue to take nice jumps, but it would fall back after each jump. Eventually we won a key customer who was able to create sustained growth for the company over the following year.



2. Decrease operating expenses. Depending on the stage of the company, this objective may be changed to sustain or even increase operating expenses. However, my company had viable shipping products. Cutting back expenses in many areas while increasing expenses in sales was as much an art as science. When I started at the company expenses were almost three times the revenue. After 18 months they were one quarter of the revenue. The revenue had grown significantly which helped. Some of the change was due to cost cutting – the company was trying to do too much at once and was not focused on the success of their core product. If you only look at the beginning and end you would pat me on the back and say "great job", however, it wasn’t that simple. In fact, initially I increased operating expenses as we tried to get into new markets around the world. In retrospect (hind sight is always 20/20), we should have stayed in our American markets until the company was break even or profitable before going over seas. The other piece to cutting operating expenses was related to systems — accounting systems, inventory systems, engineering control systems, etc. We had engineering, sales, and marketing in several countries so it made sense to build systems to keep the flow of information efficient. In retrospect, the systems could have waited until the company was more stable. Yes we achieved the objective, however, we did it the hard way.



3. Increase product margin. This may or may not apply to your company depending on they type of company and what financial metrics make sense for your company. In our case, margins under 28% just didn’t make sense and we were not anywhere close to this. We made a plan, executed the plan, and 12 months later we were North of our objective.



4. Bring a new, high-margin, high-value product to market. It seemed we were sitting on a gold mine. This new product had a couple of installations that seemed to be working perfectly. It was time to do a full launch of the product and change the landscape of the company forever. Unfortunately, the market did not embrace the solution. This happens in any market with any product category. You can’t plan for this type of outcome. Ultimately, we had to retreat after spending significant resources on the project.



5. Find a new application for the technology. This we did. It was an exciting application in a new market. The market place was hungry for the product. The internal challenge was how to keep to our smaller budgets and still develop and bring this product to market. Ultimately, we spun this product off into another company to give it wings to fly.



Looking back, objectives 4 and 5 were in conflict with each other. If we believed the product we had already developed would be the next generation product for the company we should have focused our energy there and not on coming up with yet another next generation product. On the other hand, if the new product for a new market seemed like a better strategy for the company, we should have focused there and not tried to launch the other product. We tried to tackle too many things at once. For a small, growing company, this can be death. It almost killed us.



As I enter my new venture, I’ll be asking harder questions, making tough decisions with additional experience (good and bad) under my belt. Hopefully, I will be able to set better objectives and ultimately avoid the mistakes of the past. However, with any new venture, I’m sure I will create new mistakes that no one has thought of yet! Even so, I will be setting objectives and reviewing them daily, weekly, monthly, quarterly, and annually. What does your report card look like?



Dano Ybarra is a global executive, serial entrepreneur, father, husband and Internet pioneer. To learn more about Dano Ybarra and to read, view or listen to this article please visit www.danoybarra.com. You can subscribe to any of the available formats of the article at this site.The original post can be found at http://bit.ly/gJ4WWG