In one of my most popular posts (in terms of incoming search traffic), I described how to conduct high value monthly business reviews (MBRs). In my experience working with many companies, MBRs are the simplest and fastest way to improve clarity, accountability and performance. If you are not conducting MBRs now, I highly recommend implementing them into how you run your company.
However, I now want to warn you about the main reason not to conduct MBRs.
YOU as the leader must deal with what you learn.
If you, as the leader, are not prepared for the possibility, probability, or eventuality of uncovering underperformance in your leadership team, then perhaps you would prefer not to go down this path in the first place. It’s kind of like avoiding cleaning out your garage for fear of what you’ll find.
This spotlight on performance will identify areas of weakness in the business and potentially among your executive team. Once you have this information, it calls for action and you now are the one who must deal with it.
Here’s a real example from my work (disguised slightly.) Recently, I observed the third monthly business review with a client team. We started the process by first creating aligned plans for the entire leadership team, and then conducted monthly business reviews at the end of the first, second, and third months. The business results for the first quarter are quite good – almost. The company is exceeding its revenue plan – yet profitability is not on track just yet.
Why not? Product mix.
Exceptional revenue growth in one part of the business is masking a revenue shortfall in the other part of the business, such that the overall revenue is above plan but the underperforming part of the business is seriously below plan. This revenue mix has created a profitability problem, since the costs in the underperforming part of the business are relatively fixed.
But not only is there a revenue mix problem – there is a leadership problem. (Isn’t that always the case?)
Over the course of the first three MBRs, every person on the leadership team has stepped up their game. Their plans are getting tighter, they are thinking more clearly, and they are communicating with power and precision. They are taking ownership of their results like never before.
With one glaring exception: the person running the underperforming part of the business. When it came time for this person to present his MBR update, several problems came to light. He did not have a clear diagnosis of why the business was not on track. Sales were not closing according to plan, but when asked about breakdowns in the sales efforts, he could not articulate what the issues were, much less what he planned to do about it. Further, critical action plans were not complete.
The MBR process is shining a bright light on this part of the business and the person leading it.
It’s time for some action on this underperformance and the leader of the overall business has to make the call.
Not the easiest place to be, but that is his job. Yours, too, as a leader.
This is why I say, beware monthly business reviews – they will uncover root problems and causes. And it will be time for you to deal with what you learn.
(Next week, see my upcoming post for some approaches I suggested to this client to thinking about this problem.)
What is your biggest challenge around conducting Monthly Business Reviews? Leave your answer in the comments section below – or submit your question by clicking here: Ask Ron and Ron’s answer to your question may appear in an upcoming blog post.