In 2010 the World Economic Forum issued a paper which argued that information is becoming the next hot asset class. The general argument was simple and compelling: whereas a century ago capital was the number one commercial input factor, today it is information that counts. We can see the validity of this argument by conducting a quick thought experiment. If you were a medium-sized manufacturing company operating in a very competitive market and trying to satisfy choosy customers, which input would you value more: ten million dollars to expand your factory or reliable data about your customers, needs, preferences, and past buying patterns? Read the rest of this entry »
A Change in Direction
Every new company starts with a vision. Sometimes the vision is about how the product will look or what it will do, sometimes the vision is about a particular unserved market need that you know, deep in your bones, you can serve with a killer product. However it starts, the vision is big and bold and enticing. So you pull together a small team of people you know you want to work with and you roll up your sleeves and you get started. Read the rest of this entry »
Gain a Competitive Advantage Through Upstream Reporting
In an earlier blog we covered the topic of pushing information down to customers through downstream reporting. Now we’re going to think about pushing information up to franchisers, parent companies, and other people who are not necessarily on the front lines but require information from multiple sources to make strategic decisions. Read the rest of this entry »
Increase Sales and Customer Satisfaction with Downstream Reporting
It’s become common to say that we live in an information-rich world. The Internet has eliminated distance and smartphones have made it possible for us to access anything, anywhere, anytime. But how many of us really use information constructively in our businesses? How many of us have thought about how to use information to improve the service we provide to our customers and, by extension, make them aware about how much they rely on us to get the job done? At Brightmetrics, we call this downstream reporting – pushing relevant information down to those who can benefit from it. With a bit of creative thought, information can become a great way to improve not only the services we provide to our customers but also how highly they regard what we do for them – and also a way to identify other opportunities for mutual benefit. Read the rest of this entry »
4 Core Financial Disciplines to Track in Your Company
In previous blog posts I’ve written about why an Executive Support System (ESS) is important in helping CEOs to make forward-thinking decisions. I’ve also explored some of the detailed metrics and ratios that an ESS tracks, like the three types of profitability metrics.
Now I’d like to give a quick overview of the four core financial disciplines that every CEO should be monitoring in their companies. Read the rest of this entry »
Should a CEO Care About Net Profit?
“What’s the bottom line?” This phrase is so overused in business and popular culture that I’d venture to call it a cliche.
If you’ve ever watched an executive look at an income statement, you would realize why “the bottom line” has become a part of our everyday parlance. Most CEOs glance briefly at an income statement before skipping right down to the bottom line at the end of the statement: net profitability.
While net profitability is important in representing the overall health of a business, it is one of the least actionable metrics, meaning there is very little you can do to directly change net profitability by itself. Read the rest of this entry »