Economic drivers.

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It might be a case of redefining your vision and creating a niche market for your goods, but then you must reset your economic drivers.

“Noticing small changes early helps you adapt to the bigger changes that are to come” – “Who Moved My Cheese” by Dr Spencer Johnson.

If you are able to accept that change is inevitable then it becomes a lot easier to front up and ensure that you don’t get left behind.

The understanding of your economic drivers is probably second only to leadership in importance of achieving your goals. They can be divided into two parts:

  • How and where will you make the returns that you need and want.
  • The measuring of the principle parts of your business that together with the Key Performance Indicators (KPIs) that will drive and monitor progress towards both your financial goals and any other primary goals you have.

To be successful they have to be in harmony with your brand values, the markets you operate in and the customers you serve. Here lies both the threat and the opportunity, we operate in an age where change is the norm and todays breakthrough technology is part of normal life tomorrow.

Businesses have to be aware of and closely monitor their Key Performance Indicators, those indicators that can be an early sign that the markets could be changing and you are not totally in tune with your customers/clients. You will never win a fight with the markets, if the markets change and you are out of sync with them then it is only a matter of time before your business contracts and becomes non-viable. React in a timely way and you will grow with the changed market.

Another side effect of not adjusting your economic drivers to fit in with a changing market is that you will be distancing yourself from your employees, their goals and targets will become unachievable, they will become disenfranchised, and the ones that really care and will have been the life blood of your business will probably start suffering, with stress being just one of the many potential consequences.

Notice small changes early, investigate and establish the causes, put a plan together to take advantage of the changing markets and the new wants and needs of your customers. Use it to invigorate and stimulate your staff morale, develop the trust and confidence of not only your staff but also most importantly your customers/clients, be a true leader by leading the way.

Your economic drivers should be structured in such a way that every one’s efforts are in tune with each other’s. There should be no conflict, if you pride yourself on quality and no returns then make sure there is a KPI for the number of returns not just volumes out of the door, at the same time make sure that the number that need to be got out of the door is achievable with the quality control process you have in place. Then measure and reward accordingly.

Another new and growing bye product of this changing world is that the younger generation are adopting a different attitude to work. The concept of “retirement” is disappearing, with the constant talk of and the actual raising of the retirement age should we be surprised? They no longer talk about working to retirement or even having a work life balance, they refer to having a “life style” and work has to blend in with their “life style”. To some extent this is playing a large part in the growth of the of the self-employed and it is also having an effect on working habits. Even if the market that you operate in are not changing you may need to be more aware of how you deliver your product or service to attract and keep the people you want and need. We have already seen the growth in working from home and the use of hot desking, all this needs to be considered when reviewing your economic drivers.

Your economic drivers are both the principle financial rule of being in business (making the returns you need), and adjudicator (monitoring whether you are keeping to the financial rule). Get your economic drivers right and you will be successful and content, get them wrong and the implications can be painful.

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