The magical 10 minutes – part 1
How long does it take to check if your management team is pulling and pushing in the same direction?
In a series of 6 blog posts we will explain how you can check alignment in your management team in just 10 minutes and we will show you examples of the outcome in various software companies.
Asking each individual member of you management team (including yourself) to consider and answer 3 groups of questions provides the alignment gap.
The 6 sources for financial growth
The first blog post deals with the first group of questions about the sources for financial growth
Ask each individual member of you management team to do the following:
Please prioritize the following 6 sources of financial growth for our company in the next 18 months:
New markets: A new market is a market or market segment where you are not recognized as a player. A new international market is also a new market even though you already have a recognized position in a similar market somewhere else. Thus if you have a 75% market share in a certain market in Norway, entering the same market segment in Germany counts as a new market.
New customers: New customers are customers with whom you do not have a current business relationship. If your top priority is to move into new markets, new customers should be among the top 3 also.
New products: New product and services are either complementary modules to your current offerings or completely new products or services. Minor improvements of and extensions to current products for which you do not charge an additional price are not considered new products.
Existing customers: Existing customers are customers with whom you have a current commercial relationship (which means that you send your customers invoices and the customers pay them).
Assets: Independent Software Companies seldom perceive themselves as “asset” companies. However, many ISV have assets that they are not aware of. Your channel of resellers is an asset. Your Intellectual Property Rights are your assets.
The cost base: The cost base is primarily the operational expense associated with running your business and the cost of goods sold associated with producing your products and services.
You MUST prioritise the sources for financial growth 1-6. Running a small and medium sized company and especially growing a business requires the ability to prioritize. Too many small and medium sized companies believe they can pursue several sources of growth simultaneously.
They cannot and they will fail when trying.
The next blog post is providing questions about your competitive situation and environment.
This series of blog posts on alignment uses concepts from the ValuePerform strategy framework.