Steven Cesare, Ph.D.
A business owner from Kentucky called me the other day to talk about his company’s overall year-to-date performance. Naturally, the narrative consisted of myriad strengths and weaknesses, actions items, and change management concerns. Lamentably, the business owner’s focus lacked a suitable strategic structure essential to ensure his organization’s systems were in alignment and predictive of success. As such, I recommended he conduct a mid-year audit to reorient the company’s direction for the second half of the year. Congruent with the Balanced Scorecard, here is a sample of the audit items I proposed to him.
- How do the current mid-year results for each revenue stream compare to the results for the same timeframe across the rolling three-year average?
- What three key drivers are responsible for the mid-year revenue status of the company?
- Based on the rolling three-year average, what is the current YTD ratio of monthly enhancements to monthly contracts (or change orders to original construction bid)?
- What is the current company debt-to-equity ratio, and how does that metric compare to the rolling three-year average and the trend line for the remainder of this fiscal year?
- Relative to the rolling three-year average, what are the current percentages of outstanding Accounts Receivables for the past 30, past 60, and past 90 days?
- Relative to the rolling three-year average, what is the current field employee (e.g., Laborers, Foremen, Irrigators) retention rate?
- What is the average length of time a vacant field position has remained unfilled YTD?
- Relative to the rolling three-year average, how many work-related injuries have occurred YTD?
- What percentage of field employees are fully trained and certified?
- How many job applications for field positions has the company received per week YTD?
- Compared to the rolling three-year average, what is the current YTD percentage of direct expenses, indirect expenses, administrative expenses, and net profit relative to overall company revenue?
- Based on the rolling three-year average, what are the current YTD Hourly Average Wage, Burden Rate, and Revenue per Man rates for each revenue stream?
- What are the current YTD variances between estimated price and actual price for all maintenance, enhancements, construction, and irrigation work?
- What specific cost containment initiatives were developed at the beginning of this fiscal year, and what is their current and projected year-end status?
- Relative to the rolling three-year average, what are current overtime summary rates (e.g., percentage of total regular hours, overtime pay)?
- How many current jobs have received two customer complaints or a negative online review YTD?
- Is the current sales pipeline at the expected 5x sales goal of proposed maintenance revenue (i.e., 3x for proposed construction revenue)?
- Has the New Client List expanded by at least 25% this fiscal year?
- Relative to the goals established in January, what is the average quality score for each current job?
- What are the current results of the company’s social media strategy (e.g., clicks, reach, shares, engagement rate, followers)?
Hopefully, the information culled from the mid-year audit questions above will lend guidance, purpose, and urgency to ensure the second half of the fiscal year enables the company to achieve its annual business goals, while establishing a sound platform for next year’s strategic plan and financial budget.
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