You’ve finally found it…

Whether you are in growth, turnaround or exit mode – your objective is to create optimal sustainable increase in profitability. That means optimal corporate performance.

This resource is designed for CEOs unfamiliar with Critical Factors (CF for short) — and for those seasoned CF veterans that want a refresher course on these foundational principles of corporate performance management.

It’s also a road map of sorts.

You see — all business owners and managers are at various levels of STUCK.

At this level, it's not so much about DOING things but about GETTING THINGS DONE through other people.

There’s just so much to consider when you need to get things done through people who have a mind of their own.

From receptionist to Fortune 100 CEO — we are all looking to find fulfillment in what we do — always looking for a sense of accomplishment. It’s our defining characteristic.

Optimal corporate performance requires an alignment of the objectives of the corporation and the personal objectives of the people necessary to achieve those objectives – along, of course, with the structure to monitor performance and ensure timely execution of the business strategy.

This page is here to help you master this corporate performance management stuff - or understand everything we do if you have us do it for you.

And by “stuff” we mean…

The Process

It’s the same process every successful company ultimately evolves. In fact, it's at the heart of every successful sports team.

This is a systematic process for getting EVERY member of your team working in alignment, inspired to hold themselves accountable to performing at their best to achieve your business vision.

This process works for small and enterprise level businesses. It works for mom-and-pop shops and billion dollar retailers. It works whether you sell services or widgets.

This process works because it goes beyond strategy... beyond software...

This process works because it incorporates the human element into execution...

...while it systematically:

  1. creates alignment for maximum efficiency and productivity
  2. drives accountability to the budgets and performance metrics of your business strategy
  3. inspires engagement and therefore the best performance from every member of your team

We call it Corporate Performance Optimization or CPO.

Read this page carefully. Read it multiple times and commit it to memory.

This is the stuff they don’t teach in business school.

Speaking of Alignment...

...before we proceed, let's make sure we are in alignment. You are busy running a company and your time is valuable so you should understand the philosophy behind our work.

It starts with a simple three word sentence that we believe is the key to success in ANY endeavor.

Whether business or personal, we believe you should think of these three words before you say or do ANYTHING. They are the foundation for the CPO process.

They are, simply:

“What’s the Goal?”

If you don’t know what the goal is, how will you achieve it? Moreover, when running a business, if you are not clear on your goals, your employees can’t possibly achieve them.

Thus, we believe that identification and clarification of the goal is essential to the execution of any strategy to achieve it. We'll get into 'clarification' later but, the ability to effectively execute any strategy starts with knowing “What’s the Goal?

We also believe that the formula for success in any endeavor is:

  1. Clear and Quantifiable GOALS
  2. A Comprehensive STRATEGY to Achieve the Goals
  3. Systematic EXECUTION of the Strategy

In terms of strategy, without regard to how brilliant or well-conceived, the value of any strategy is a function of the effectiveness of its execution. And all business strategies must be executed through people.

So it is essential to not only (1) clarify and quantify your goals and (2) develop a comprehensive strategy to achieve them, but also to (3) execute through an engaged team working in alignment towards a common goal.

Creating alignment, inspiring employee engagement and driving accountability are at the heart of the CPO process. It is a systematic process for inspiring excellence while ensuring efficient and profitable execution of the business strategy. And that process begins with the business owner/CEO.

So, if you are the CEO of a small business and you want to gain greater control and drive increased productivity for maximum sustainable growth in profitability through managing rather than doing then we are in alignment, this site will become a favored resource and this article is the place to start.

Learn the Steps to CPO

The following flowchart outlines the CPO process.

Download a PDF version here

Print this PDF version and keep it handy. Simple common sense at first glance, as we delve deeper into the process, this outline will help you to maintain that critical 40,000 foot perspective.

Reference it often, become familiar with the process and turn common sense into common practice!

From company conceptualization to company sale, following the CPO process will consistently improve productivity for optimal sustainable increase in profitability and maximum business valuation (and bankability).

Here is a flowchart of the Corporate Performance Optimization system…

Here are the steps:

  1. Determine Your WHY?
  2. Clarify & Quantify Goals
  3. Inspire Employee Engagement
  4. Develop a Comprehensive Strategy
  5. Create Strategically Aligned Accountability
  6. Consistently Monitor Performance
  7. Make Timely Course Corrections

…in that order.

Lean in to this article and pay close attention — we’re about to reveal the exact process we use to optimize management performance in a multitude of companies in various industries including…

  • Consumer Products
  • Consumer Services
  • Aerospace
  • Health Care
  • Business Services

… just to name a few.

Let’s begin with…

Step 1 – Determine Your WHY?

Remember that key to success?

In everything you do, start with “What’s the Goal?”

That probably made sense to you and that’s why you are still reading this.

But even deeper than that, if the key to success is knowing clearly what your goal is, then the ultimate secret to success is knowing WHY.

It’s not enough, for instance, to know that my goal is to lose weight. In order to make it more likely that I will achieve my goal, I need to ask myself ‘WHY do I want to lose weight?’

Ask yourself - which of these people is most likely to achieve their goal of losing weight?

  1. Typical person making a New Year’s Resolution
  2. Bride seeking to fit into wedding dress

When you ask WHY, you not only have a goal, you have a purpose.

WHY are you in business?

If it is just because you inherited the business or were attracted by a high salary as CEO, it is likely that you will be less successful than if you are in business because you believe you have a superior product or service or - better still - a passion for a product or service that you believe will make a positive impact on the world.

And this is critical because, as Simon Sinek puts it best:

People don’t buy WHAT you do…

...they buy WHY you do it. They buy your promise to them.

When your WHY is out of alignment with your customers’ WHY, sales decrease.

When your WHY is out of alignment with your vendors’ WHY, quality diminishes.

When your WHY is out of alignment with your employees’ WHY, execution declines.

Needless to say – getting clear on your WHY is fundamental to the success of your business.

Here’s a simple way to start developing that clarity…

5 Simple Steps to Determine Your WHY

Before you initiate a new directive or even simply set a new task – go through this exercise.

In fact, take just a moment now to write down the answers to these 5 questions:

  1. What is your primary product or service?
  2. What are the Features of your product that are unique to your company?
  3. What are the Benefits that your customer uniquely derives from your product or service?
  4. Looking at your unique features and benefits, develop a statement to your customer: your promise. (It is okay to reinsert some of the benefits that your competition offers but attempt to develop a promise that your competition cannot make.)
  5. Finally, shorten your promise to a statement that you and every employee in your company can memorize - then check it for its emotional impact
    • Is this a statement that will make your customer FEEL good about doing business with you?
    • Would it inspire your vendors to FEEL the need to deliver in terms of time, price or quality?
    • Is it a statement that makes your employees FEEL good about dedicating themselves to delivering upon it?

This is your MISSION. It is the reason your company exists. It is your WHY.

For example, we’ve done a good deal of consulting in the aerospace industry.

By definition, there are three primary ways you can compete as an aerospace contractor:

  1. Quality
  2. On Time Delivery
  3. Price

And, of course, you can only pick two.

Now in the aerospace industry, quality is very important. You do not want airplanes falling out of the sky because you chose to use low quality materials or components.

The industry is also very complex in that no company actually produces all of the millions of components that go into, for instance, the plane, helicopter, spaceship, etc. that they ultimately sell.

Thus, on-time delivery of each component that subcontractors produce is critical at every step along the way.

And the industry is highly competitive. There are thousands of subcontractors competing to deliver to the likes of Boeing, Lockheed Martin, Northrop Grumman, etc.

Only the most efficiently run can survive and develop a reputation for consistent on-time delivery of high-quality components at a competitive price.

Given the exercise of choosing two of the three foregoing considerations, management chose quality and on-time delivery.

Paying attention to the interaction between sales people and customers, however, revealed that price was the primary focus of the sales message.

Further, an analysis of employee productivity exposed the fact that the company had averaged on-time delivery for only 58% of all orders in the previous three years.

How did we start the process of transformation to an 83% and growing on time delivery record?

  1. The decision was made that, despite past performance, the company would dedicate itself to delivering the highest quality components on-time. Thus, the Primary Product or Service was not merely machined components, it was On Time Manufacture of High Quality CNC Machined Components.
  2. Among the features of this company was the fact that they had invested in a good deal of machinery. This gave them the ability to deliver a wide range of components. They also had unique expertise on their team that enabled them to not only understand customer specifications but to also assist in the design of complex components. And they had developed and maintained a reputation for delivering high quality components.
  3. Identification and analysis of their unique features enabled them to decide that the benefits they would uniquely focus upon would be to deliver peace of mind in terms of quality and on-time delivery along with the convenience and efficiency of acquiring a wide range of related components from one supplier.
  4. It was also determined that assisting customers with design was diminishing the profitability of the company. Thus, while the company would still provide such services on a select basis, it was not part of the customer promise. Rather, all of the emphasis was placed on on-time delivery of high quality components.
  5. After much input, discussion and refinement, the rallying cry of the company became ‘On Time Quality without Compromise’ which every employee was required to memorize and exemplify. The ‘without compromise’ part meant no more excuses; no exceptions. It added the necessary emotional component.

The result?

  • Employees ON TIME to work
  • 83% (and growing) ON TIME delivery
  • Sales team given more confidence to focus on ‘value’ rather than ‘price’ – higher profitability
  • Company had always been renowned for quality but the new focus on ‘on-time quality without compromise’ somehow translated into clean workstations and a focus on machine maintenance (less down time)

Do you see how clarifying WHY the company exists has such an impact on the entire culture and overall profitability of the company?

It’s powerful stuff.

Before you do anything, start with the WHY?

Even before you think about your goals (the WHAT) or the strategy (the HOW), think of your WHY?

The pillars to sustainable increase in productivity and profitability are:


It’s only once you know WHY you are in business (MISSION) that you can effectively develop your VISION.

The VISION is the ultimate goal.

It tells us where our MISSION will take us. It defines WHAT we will achieve as a result of accomplishing our MISSION.

And only when we are clear on our VISION (WHAT) will we be able to develop the strategy (HOW) to achieve it.

Thus, the MISSION is the foundation for business success.

In a business without a clear MISSION, the direction and production of the entire workforce will be inefficient. Goals will simply have no purpose.

It's often been ascribed to companies without a plan but, in fact, a company without a MISSION is like a rudderless ship - going around in circles, weathering the storm or finding itself adrift.

In all instances, a company without a MISSION will not achieve its full potential.

So start with your MISSION; it is the reason your company exists; the promise you fulfill to your target audience; the foundation for your success.

What is your MISSION?

Here’s a worksheet you can download to help develop your Mission Statement.

Download a Word Version here

In the next step, we’ll see what’s in it for you and your team when you accomplish your MISSION and deliver on your promise to your customers…

(By the way, I do a FREE weekly online meeting with CEOs to help with challenges and answer questions about this process. It's called Monday Lunch. If this stuff interests you — join us by clicking here.)

Monday Lunch

Step 2 - Clarify & Quantify Goals

Next we want to focus on your VISION – the ultimate goal for your company.

In order to clarify your VISION, consider what inspired you to create your own company in the first place (money, freedom, lifestyle…?) and what motivates you today to get up each morning and be the driving force behind its success.

For some, there will be a tremendous gap between the original inspiration (to change the world – at one extreme) and the current motivation (to survive the day – for many business owners).

For others, the original inspiration might have given birth to remarkable growth (unforeseen and therefore unplanned for) and the motivation each day might just be to gain control.

And for others still, there may only be a small gap between the original vision and the goals of the day but the excitement and joy may have dissipated.

Regardless of your current level of success - or stress as it may be - your first step was to determine WHY you are in business…

Now it is time to focus on what it means to achieve the level of success to which you aspire.

What is your ultimate goal for your company?

What is your VISION?

Here, it is important to ensure that your VISION is quantifiable – that you are able to communicate it in specific numbers in terms of revenue ($), units sold (#) profitability (%) AND time-frame.

In this way you will be able to give each member of your team numeric goals (revenue, cost, number of presentations to generate the revenue, number of calls to generate a presentation, required support personnel, etc.) to which you will hold them accountable.

The VISION statement for your company is an internal statement of the goals for your company. It is what you will achieve based upon your successful delivery of your MISSION.

The way you word your VISION statement is very important. If it is vague, you will not be able to strategically align the resources of your company to realize your VISION.

If for instance, your VISION is to be an industry leader - that is great! It is a lofty goal. It may even be a goal that you can rally your team around - BUT, it is not a goal that can be used to align your resources or drive the strategy for achieving it - until you translate it into a quantifiable goal.

Again, the VISION of the company should be expressed in terms of a revenue goal that can be broken down into sales units sold, profitability and timeframe. Your VISION statement might read…

"We will achieve $1 billion in revenue by 20XX by being the best at sourcing the products we sell at the lowest price."

Again, a great goal but not a great VISION statement. The more specific your VISION, the more likely you will be able to achieve it… profitably.

In this example, for instance, it will not make any sense to achieve $1 billion in sales if it costs $1.1 billion to generate those sales.

Thus, a better VISION statement would be…

"We will achieve $1 billion in revenue by 20XX by being the best at sourcing the products we sell at the lowest price while delivering them to our customers with maximum efficiency."

Getting closer. But, better still…

"We will achieve $1 billion in revenue and $400 million in profits by 20XX by being the best at sourcing the products we sell at the lowest price while delivering them to our customers with maximum efficiency."

The best so far but still not right.

And, in this instance, when we say ‘not right’, it is not a matter of being judgmental relative to the choice of words or the VISION itself, it is the practical matter of the ability to map this VISION to specific metrics to which your team can be held accountable.

What, for instance, is the definition of 'lowest price' or 'maximum efficiency'? Can you quantify this?

How about…

“we will achieve $1 billion in revenue (for a 37% market share) by selling 273,000 units of our product at a gross profit margin of 32% and an operating profit of 14% by 1/1/2017.”

The more specific, the better...

Simplistic – yes.

This is, however, absolutely critical to most efficiently achieving your VISION because ultimately, in order to realize your full potential, you must get everyone on your team onto the same page.

That means creating quantifiable goals that can be broken down into smaller and smaller goals (sales revenue, sales units, sales calls, etc.) so that each employee can see how their performance impacts the ultimate achievement of the VISION.

Everyone within your organization has a specific contribution to make to your success. If they are to work efficiently, they must be aligned.

You want everyone, not only philosophically but also operationally, aligned with your strategy which can only be accomplished when everyone is in alignment with your VISION.

Thus, it is absolutely essential to your ultimate success that you determine, in clear and quantifiable terms, your VISION for where your MISSION will take you.

And, by the way, WHO is going to take you there?

In the next step we will go into Employee Engagement - among the most important yet obviously neglected or poorly executed aspects of running a company.

Step 3: Inspire Employee Engagement

According to a recent article published on the Harvard Business Review Blog Network, “Gallup’s research shows that engagement among US workers is holding steady at a scant 30%.” This means that seven out of ten people are either ‘checked out’, or actively hostile toward their employers. Seven out of ten.”

We have worked with numerous business owners/CEOs that see their employees as obstacles to their success – and sometimes rightfully so.

We have also worked with business owners/CEOs that have great employees that they love to work with but still have challenges with creating sustainable increases in productivity.

In all instances, without regard to the level of competence or incompetence of your workforce, the objective is to most effectively utilize the resources you have available to you in order to operate productively, efficiently and profitability.

It is critical to your success that you develop a strong foundation upon which you can build momentum. And, while your product or service is essential to your success, the first thing to recognize is that your employees, for better or for worse, are that foundation.

Consider also that, for the most part, compensation to employees is the largest line item on any income statement. Thus, it is imperative to inspire the greatest productivity possible out of every employee.

It’s not that you owe them a living; it’s that you owe it to yourself to most effectively utilize this critical resource.

To this end, it is important to realize that the number one motivating factor in the workplace is not money. No one will work for free but money is not the answer to inspiring optimal productivity.

The number one motivating factor in the workplace is a sense of accomplishment.

And the number one inspirational factor is acknowledgment of that accomplishment.

Common sense dictates that a demotivated person is less productive than a motivated person.

In fact, you can simply ask yourself how productive you are when you are faced with a job you don’t want to do and how much less productive you are when you have someone telling you that you should have done it better, faster or differently.

We have found, through informal polling over the years, that on average, a demotivated employee works at approximately 32% of their full potential (not to mention the negative impact they have when dealing directly with customers).

So, if on average, 70% your company is operating at approximately 32% of their full potential and assuming the remainder are working at 100%, your company is operating at approximately 52.4% of its full potential productivity ([30% x 100%] + [70% x 32%] = 52.4%).

What is that costing you?

So what do you do? – coddle people and bribe them to do their job? – constantly threaten them with a pay cut or termination?

There are basically two ways to motivate people:

  1. Carrot – the coddling
  2. Stick – the threatening

NEITHER of them is effective – long term.

Think about it.

If you are using the stick approach, you need to be present and micro-managing every aspect of performance. The moment you let up (or turn your back), that employee will revert to whatever unproductive behavior concerned you in the first place.

On the other hand, if you are using the carrot approach, you may be creating a situation in which you only get the performance you’re seeking (and already paying for through a salary) by offering the bribe of a bonus.

By these definitions, you don’t want to motivate your employees, you want to inspire them.

Hopefully it is clear that, by inspiration, we do not mean coddling (in any way!).

Inspiration is when you touch something inside a person that makes them want to perform at their very best without regard to who is watching.

The difference is that motivation is an external force imposed upon a person; inspiration is an internal force that you cultivate within a person.

It is inspiration that leads to optimal productivity and therefore optimal profitability.

Again, creating an engaged workforce inspired to hold themselves accountable to their full potential is among the most important - yet obviously neglected or poorly executed - aspects of running a company.

If you want to start increasing productivity today, increase employee engagement.

If you want to increase engagement, give your employees a sense of accomplishment.

If you want to give your employees a sense of accomplishment, it is essential that you give them clear goals (derived from steps 1 and 2) and an objective standard by which to measure their performance (step 6).

An engaged workforce is a productive workforce.

Step 4 – Develop a Comprehensive Strategy

Small business is the backbone of the U.S. economy.

According to the U.S. Census Bureau, small businesses account for 99.7% of employer firms in the U.S. and employ approximately 120 million people. Small business creates 2 out of every 3 jobs in the U.S.

Pretty much anyone with an idea or a passion has the opportunity to create their own business. And, while government regulation does not require that companies operate with a business plan or any type of strategy, the realities of attracting capital do necessitate a business plan. Why?

Capital sources and financiers want to know if you are building on solid ground. They want to know the prospects for actually making money by investing in your venture. Not only do they want to know what you plan to do but they want to know the return they can expect, when they can expect it and the risks to their investment.

So they require a strategic plan providing answers to these questions and to which they can hold you accountable.

But if you are not seeking outside capital, do you still need a business plan?

Spoken or not, your employees have questions about your company too. How is the company doing? Will they still have a job in a year? What are your plans? Where do they fit into the plan? What does this organization represent? Can they find fulfillment in this job? Is it just a paycheck?

Without regard to any outside influence requiring it, EVERY company benefits from developing a strategy before taking action.

When companies operate without a strategy they operate - yes, you know it - like a rudderless ship. They tend to go around in circles, miss opportunities, find every roadblock and simply operate less efficiently (less profitably).

How many companies do you know where they pride themselves on their ability to overcome problems? How about not encountering the problems in the first place? That takes planning. It takes a strategy. And, in order to get everyone in the organization in alignment with the strategy, it requires a written plan.

Once your goal(s) are clear, it is imperative that you develop a comprehensive strategy to achieve your goals BEFORE taking any additional action.

When we speak of strategy, we mean the integration of the activities of every employee in every division and department of your company.

And, when we speak in terms of comprehensive strategy, we mean identifying, not only everything that you want or expect to happen, but also everything that can go wrong (downturn in the economy, new competition, lost opportunities, etc.).

You need to have a written plan.

In fact - as a perfect example - the reason I most love football is because it represents to me the most perfect coordination of strategy and physicality other than, perhaps, the military.

Every team has an overall strategic plan (their play book), both offensively and defensively. It determines what they will do in every given situation. And they practice those plays over and over again. But it doesn't end there.

They don't just assume everything in the strategy will go as planned.

They develop what we refer to as a 'comprehensive strategy' for the use of those plays every week. They anticipate what can go wrong.

They watch films of their opponents to determine what the opponent is likely to do in a given situation.

They develop a strategy for every conceivable situation in the game taking into consideration:

  • Down
  • Field position
  • Score
  • Time on the clock
  • Player injuries
  • Opponent tendencies
  • Opponent injuries

In fact, the strategy in football is so well conceived that, taking the offense for instance, on game day, in any given situation, only one person speaks in the huddle - the quarterback. And when the quarterback gets in the huddle, all he says are three things:

  • Formation
  • Play
  • Count

With just three instructions, all eleven people in the huddle immediately know their assignment. They also know what to do if the defense makes changes at the last moment. They work as a team towards a common goal with each member of the team knowing every aspect of the strategy and being able to make adjustments to execute the strategy.

Does your management team know what to do in any given situation? Are they working in concert with their counterparts in each department? Are the staff of each department working in perfect coordination?

That can only happen with a comprehensive strategy; a strategy that is broken down into quantifiable goals for every member of your team; a strategy that has contingencies built into it for when everything doesn't go quite according to plan.

You know your company and your industry better than anyone else. Conduct a planning session with your team to develop specific strategies to achieve your objectives. As part of the process, go back - challenge your assumptions and build contingencies in for any problems you can foresee.

Develop a comprehensive strategy.

Step 5 – Create Strategically Aligned Accountability

You can have the greatest product or service in the world. You can have a brilliant business strategy. But even the most brilliant strategy, unless effectively executed, is worthless.

It is the efficiency of execution that determines the degree of profitability.

And all business strategies must be executed through people.

Thus, holding people accountable to the strategy is essential to optimizing profitability and maximizing the valuation or bankability of any company.

Holding people accountable, however, is easier said than done.

Among the greatest challenges to managing - is controlling people. As I travel and do work around the world I see the frustration of business owners who just assume that paying people to do a job entitles them to expect the best out of those people. Some of them even demand it.

It simply doesn't work that way.

It doesn’t take a degree in psychology to understand that people have a mind of their own. And, for the most part, those peoples’ minds, consciously or not, seek a sense of accomplishment and purpose.

So holding a person accountable to achieving a goal will be more successful if the person derives a sense of accomplishment from that goal.

And, just as..

.. our VISION became clearer once we had established our MISSION

.. and our MISSION gave us purpose when we determined our WHY…

…so too, the process of creating an environment of accountability begins with giving each goal purpose by tying it back to the VISION, MISSION and WHY of the company.

So creating an environment of accountability is actually relatively simple when you follow the CPO process.

You’ve already:

  1. Determined Your WHY? (MISSION)
  2. Clarified & Quantified Your Goals (VISION)
  3. Started to Inspire Employee Engagement
  4. Developed a Comprehensive Strategy
  5. Created an Environment for Accountability

Now let’s look at creating Alignment.

In order for your company to achieve its full potential, it is critical that you develop a strategically aligned team.

This means a team whose individual goals are tied directly to the strategic plan. And, in order to manage the production of all of the members of the team, we break their goals into functional areas of the company.

For instance, in football, there are four primary offensive functions:

  1. block
  2. run
  3. throw
  4. catch

Those four functions are executed through three primary offensive positions:

  1. linemen
  2. receivers
  3. back

No matter what offense is being run, or what interesting plays and formations they might develop, at their core, every football team uses these primary positions and functions, which every player can readily understand, to create alignment in executing their strategies.

In the CPO process, we utilize a structure that every member of the team can readily understand in order to create alignment in executing the business strategy.

We recognize that every company is unique and rightly takes pride in that uniqueness. At its essence, however, every company, whether for-profit or non-profit, services or widgets, Fortune 100 or Startup; has six critical components:

  1. Product or Service Development - someone needs to be responsible for the conceptualization, refinement and development of your product or service to ensure it meets your customer promise
  2. Marketing - you can have the greatest product or service in the world but if no one knows about it...
  3. Sales – awareness of and interest in your product or service needs to be converted into revenue
  4. Operations - the product or service needs to be produced, warehoused, distributed and supported
  5. Finance - revenue must be collected, bills must be paid and money must be managed
  6. Administration - strategic planning, legal, risk management and human resources support the entire organization

By taking the VISION of the company and allocating the goals to these six functional areas of every company, we start the process of creating the alignment necessary for efficient and effective execution of the business strategy.

Back to our football analogy introduced in the Step 4.

Picture for this scenario that the quarterback has called a pass play. Everyone breaks the huddle. The quarterback takes the snap from center, scans the field and sees his receiver wide open down the right sideline because the defensive back has fallen down. Just as the quarterback steps into the throw for an easy touchdown he gets creamed and does not get the pass off.

Now, you won't see the owner of the team come down from the box, run onto the field and scream at the guard that missed his block. You don't see the coach come running off the sideline and into the huddle to scream at the guard that missed his block. And, nine out of ten times, you won't even see the quarterback yell at the guard that missed his block. Why?

Because everyone in that huddle and everyone on the team knows who blew their assignment. Everyone was focused on the same goal. Everyone knew the strategy. And now everyone knows who let the team down. No one needs to say anything. That guard knows he let everyone down and he knows everyone else knows. He will hold himself accountable.

The clarity of the goal and the strategy - along with the transparency of responsibility - creates an environment of accountability; an environment in which - not only is everyone held accountable - but one in which each individual holds themselves accountable.

(NOTE: Want a quick way to develop your strategy? You can get started with this FREE 30 MINUTE Planning Worksheet.)

Step 6 - Monitor Performance

You’ve done the hard part.

You have clarified your goals. You have gained the buy in from your team. Together you’ve developed a strategy for achieving your goals and the appropriate members of your team have accepted responsibility for their respective areas of operation.

Now you must develop a means of monitoring performance.

Whether you buy the latest business intelligence software… the most advanced ERP system… or just rely on documents and spreadsheets…

…you’ll want to integrate the CPO process into your performance monitoring system and ensure that it also has three critical components:

  • Consistent; not only in terms of the information to be monitored but the time intervals for monitoring as well
  • Objective; meaning that performance is measured in quantifiable terms
  • Transparent; so that everyone knows how everyone else is performing and how their performance impacts the rest of the team and the overall corporate goal(s)

Develop a schedule and ensure that everyone has it in their calendar so that they can be prepared to report on their progress on a timely basis.

Ensure that all goals are objective – meaning that they can be numerically quantified.

And, as part of the reporting process, have everyone report their progress, not only to you, but to their peers as well.

Such a system will bring everyone together and get them on the same page.

Much like the scoreboard in a sporting event enables everyone to know the status of the event at any given time, your system must ensure that the goals of the company are no longer an abstract version of performance.

It must accurately depict the status of the company in achieving its goals.

Step 7 - Timely Course Correction

The final element of CPO is adding the time element.

While companies within different industries will have a variety of resources, every company of every size in every industry has three resources in common:

  1. Time
  2. People
  3. Money

Of the three, the most precious is time.

While replacing them is among the greatest expenses in any company, people are a replenishable resource. They can be hired, they can be rented and they can be made more valuable through training. They are among the most valuable resources to any company but again, people are replenishable.

While acquiring it may be difficult and very expensive, money is also a replenishable resource. You can borrow it, you can buy it with equity and you can create it by running a profitable company. Money is a valuable resource but it too is replenishable.

The only resource that you cannot manufacture, borrow, store or acquire is time. It is not replenishable. All you can do with time is manage it. And, within a company, you must manage it in a variety of ways.

Adding a time element to your performance monitoring system is absolutely crucial to the effectiveness of the system.

Just as common sense dictates that the foundation for a house must be built before the framework can be erected, that the framework must be erected before the walls can be built, that the walls must be built before the paint can be applied, so should it be that common sense dictates that EVERY function of a company must be coordinated in order for the company to achieve its full potential.

And the resource that ties every function together is time.

It is easy to see and readily quantify the cost of time when it comes to such things as hourly wages, consulting fees, expedited shipping, etc. but it goes much further than that.

In fact, expedited shipping is a great example. Expedited shipping is a reflection of some inefficiency in planning or execution.

Other costs associated with time inefficiencies include lost opportunities and relationships due to delivery delays. Delays also impact cash flow.

Remember, time truly is money.

Within your performance monitoring system, every goal, every task, every function must have a time element ascribed to it.

AND, the system itself must be conducted on a regularly scheduled basis at time intervals that anticipate that not every goal will be achieved on time and that therefore allows for timely course correction.

Time is an invaluable resource. Build consideration of time into every aspect of your operation including the return on investment of scheduling the time to implement all of the foregoing.

The single most impactful action you can take right now is to implement the Critical Factors Management System.

The Critical Factors Management System is the Complete Corporate Performance Management System for Small Business and it is… unfortunately… far too involved to cover here. (Wow… I just noticed that this article is over 6,000 words.)

If you want to learn more about how we do corporate performance management (and get more in depth teaching about the Corporate Performance Optimization process we covered here today)…

join my FREE Monday Lunch with David Kinney by clicking here.

Monday Lunch is a FREE weekly meeting I conduct with Small Business CEOs.

It is a unique meeting format in which:

  • We work through a management challenge facing one of our CEO participants.
  • All registrants are invited to submit a challenge they are facing. In order to ensure that all participants derive value, the only constraints are that the topic must pertain to 'executive management' and 'creating sustainable profitability'.
  • Submit your challenge between Monday and Wednesday of the week prior to the session you would like to attend.
  • I will choose one challenge and prepare a brief presentation on my thoughts for a solution.
  • You will be notified of the next challenge by 9 AM on Thursday so you can determine if you would like to attend the next session.
  • During our meeting, when appropriate, the challenge will be up for discussion among all participants.
  • Complete confidentiality is maintained for all participants (including the CEO who submits the challenge).
  • Time permitting, I will share related management concepts.

It's a great way to kick off your week and have a productive Monday Lunch!

These session are ABSOLUTELY FREE and, if you’ve read this far, I know you will be absolutely stunned by the value you will receive from these sessions.

So grab a sandwich, relax at your desk and join me next Monday.

David Kinney

About David G. Kinney

David G. Kinney is the developer and CEO of Critical Factors. He has applied over 30 years of diverse, international executive management experience in start-up, growth, turnaround and exit mode to develop the Critical Factors Management System as the most effective system for executing ANY business strategy. The philosophy behind his work is that the most important ingredient to success in any company is its people. He continues to work with CEOs on a select basis to align, engage and inspire this invaluable resource to their full potential. Connect with David on Twitter or LinkedIn.


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