| As a business grows, the more moving parts it | | | | system to determine which of the many causes |
| has. And the more difficult it is to keep an | | | | may be responsible. They are able to drill |
| eye on everything that is happening. Then the | | | | down from the high level gauge which has |
| balls start to drop. Does your business have | | | | moved from the safe area to investigate which |
| as many moving parts as a Jumbo Jet? How do | | | | of the plane's subsystems may be a fault. In |
| 747 pilots manage?When a business starts-up, | | | | almost all cases, the pilot is able to |
| because of the risk of failure, the owner has | | | | identify and either correct the problem or |
| to watch everything. Fortunately, when you | | | | take action that will enable the plane to |
| start-up, there is not a lot to watch! But it | | | | land safety. If they worried about every |
| is hard to get out of the habit, which is why | | | | little non-critical problem on the plane, the |
| so many business owners continue to | | | | chances are they might only notice the big |
| micromanage the business as it gets larger. | | | | ones when it is too late to do anything about |
| Now if you could keep your eye on every ball | | | | them.In business, the owner might identify |
| in the air that might be ok. But at some | | | | that their cash reserves are declining. (Cash |
| point it becomes impossible to maintain, with | | | | at Hand is one of the biggest Key Performance |
| owners focussing on where they feel most | | | | Indicators for any business.) Having seen |
| comfortable, rather than on what is most | | | | this, the owner might ask the accountant to |
| important.Studies have shown that there are | | | | look at their detailed reports to identify |
| limits to how many different things a human | | | | the cause. Is it due to slow sales, overdue |
| being can monitor and react to. This of | | | | payments by debtors, cost blow-outs or |
| course, varies from person to person, but | | | | overinvestment in inventory.Having identified |
| everyone has their limit. For example, only | | | | cost blowouts as the cause, the accountant |
| the most skilled jugglers can keep more than | | | | might ask the operations manager why costs |
| six balls in the air. The world record is 12. | | | | have gone up. She might advise that a |
| So when we try to keep our eye on everything, | | | | maintenance problem has caused the over-run. |
| we will start dropping balls.So how does a | | | | When the operations manager speaks to the |
| Jumbo Jet pilot keep an eye on everything? | | | | maintenance superintendent, she may discover |
| Funnily enough, they have six gauges in the | | | | the problem was caused by poor quality |
| cockpit, representing the key areas of the | | | | feedstock. In other words, a cash problem was |
| plane's performance. Or in business speak, | | | | caused by supplier quality control problem. |
| the plane's Key Performance Indicators. These | | | | Further analysis is of course, possible. The |
| are the most vital to keeping the plane in | | | | owner has therefore uncovered a critical |
| the air. So if the seat 57D does not fully | | | | supplier problem by interrogating staff after |
| recline, or the airline logo paint is | | | | a key performance indicator has moved from |
| starting to flake on the body of the plane, | | | | the safe zone.By having a small number of Key |
| they do not know about it. They have the | | | | Performance Indicators which define the |
| flight attendants and the maintenance | | | | health of a business, and which are linked to |
| engineers to worry about such problems. | | | | other more detailed reports, the owner can |
| However, these personnel are highly trained | | | | fly their business using just few gauges. So, |
| to notify the pilots if there is something | | | | if there is a deeper problem in the business |
| they should worry about. The pilot trusts | | | | it will become visible. Because an owner with |
| these personnel to do their job and follow | | | | an excellent Business Management System is |
| their procedures, and only let him or her | | | | confident that they will identify problems in |
| know about things that affect the plane's | | | | a timely fashion, they can focus on flying |
| safety. So the pilots can concentrate on | | | | their business towards their ultimate |
| flying the plane.But what if there is an | | | | objective which is their real job.Copyright |
| engine problem. The plane's flight management | | | | 2005 Empower Business SolutionsDr Greg |
| system is set up so that any problem with a | | | | Chapman assists small to medium sized |
| key part in the flight system will be evident | | | | businesses with business planning, business |
| on the high level gauges. So if there is a | | | | systems and marketing strategy. |
| drop in airspeed, the pilot will query the | | | | |