Being an executive, you have probably experienced the Ambush. The context may vary but the scenario is always the same. An employee walks into your office to give you bad news for which you had no previous warning. A large bid gets booked at half the forecasted size or a project that was going to save the quarter is now a money loser, or your best customer is walking. A mix of emotions rips through your gut – fear turns into anxiety and finally anger. “Why wasn’t I given a heads up before now?!?”

Ambushes occur in large and small companies, but it’s more frequent in companies experiencing high growth. Each time a company adds a new layer of management or expands to multiple offices, the existing feedback loops break down. Information is no longer easily accessible and employees are reluctant to share bad news until it’s too late.

Bad things happen, but with an early warning you have a chance to change the outcome, or at least make proactive adjustments based on the consequences. For instance, if you know at the beginning of a month that it will not end well, you can defer purchases to better manage cash flow. Or, if you see that a customer was having a rash of problems you can proactively arrange to meet with them to address their concerns.

Here are three common executive ambush scenarios:

The Sales Forecast Ambush

Spreadsheet forecasting that relies on reps to manually update summary totals often contains optimistic or out-of-date numbers, especially when multiple quote revisions are involved. When CEOs or CFOs have no easy real-time way of auditing the forecast, or the quotes that the forecasts are based on, then they are resigned to accepting the “good news” forecast. This often leads to an ambush at the end of the reporting period.

What you really need is the ability to audit the forecast by drilling down to the source quotes in real-time. This would allow you to verify forecasted revenue, margin, and labor resources. If your forecasts are consistently 20-25% off every quarter then you may want to reconsider how you compile and review sales forecasts.

The Project Ambush

Project quotes are like a budget. They predict the profitability that the company can expect in the following month or quarter. Companies often bank on this profit, but these predictions can go sideways due to unforeseen circumstances. Without interim reports tracking a project’s financial progress, the project team and management have no early warning signs if a project’s profitability is sliding. Finding out at the end of a project that it lost money, eliminates the possibility of making course corrections mid-way through the project. Ambushed again!

By default, executives often rely on month-end reporting from their accounting systems to tell them the health of the business. Unfortunately, accounting systems are historical reporting systems, but we can’t change the past, only the future. As a business grows the consequence of error increases its risk. What’s really needed is the ability to view weekly reports that tell you in real-time the financial progress of those projects, enabling you to intervene early and change the future. If you want to control future project profitability results, then you may want to rethink how often you monitor and review project profitability reporting.

The “Lost” Customer Ambush

When a senior executive’s phone rings and it’s a customer, they’re hardly ever calling you to tell you what a great job you’re doing. Worse than that, most customers who are upset don’t call, they just leave. Once they’ve made that decision it’s almost impossible to address their concerns and get them back.  The customer concerns could have been addressed if only you had known in advance.

Executives often rely on help desk resources to notify them if a customer is getting agitated enough to consider leaving, but by the time it gets escalated the customer is already at full boil. What most executives really want is to be brought into the loop before the customer calls them.

Most help desk automation is focused on helping technicians track and resolve individual tickets. What executives want is an automatic notification when customer expectations are not being met. This allows executives to get in front of customer service issues and proactively make changes before things get out of hand.

Circumvent the Ambush

As companies grow it’s harder for executives to keep their finger on the pulse of their business. Legacy systems are no longer sufficient for the added complexity of the business.  Consolidated 365-degree reporting and analysis are painfully difficult with disconnected departmental systems.  Batch processes of historic data make it impossible for real-time, anytime feedback.

Growing businesses must know when to upgrade their systems and organizational structure. Doing it sooner is much less risky than doing it too late. Reducing the number of independent systems makes a big difference. Start by making a list of ideal KPIs (Key Performance Indicators) in advance of replacing your systems, this will help in the selection of any new system(s). While no single system is perfect, getting a single, comprehensive system that covers most aspects of the business will eliminate some of the Ambushes and the anxiety and anger that follows.

 Promys’ business software solution seamlessly ensures that service-based businesses keep pace with growth.

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