The not-so-good news: my recently-turned-16 daughter was driving. Two weeks earlier she had received probation on a speeding ticket. The “minor damage” to the car was estimated at $2700.

Time for a good talking-to by Dad.

Now, this is the same girl who got a 98 (out of 100) on her driving test (she nailed the parallel parking test in one move). She has great eye-hand coordination, and an uncanny sense of direction. Physically, she has the tools to be a skilled driver.

So I said, “#3…” (names have been changed to protect the innocent…), “#3, you need to pay better attention. You need to anticipate more. You need to know what’s in front of you, behind you, beside you. At all times. And you need to understand that the less focused you are on what’s happening around you, the harder it will be for you to manage your driving…”

As I said it, I realized that this was almost the identical advice I had given her about playing soccer. And a few days later, when a client mentioned “driving by the side-view window”, I recognized it as fundamental advice for business owners, too.

The rearview mirror

History is great teacher. Being able to look back and quantify what has happened in your business is valuable. But when history is the only view, it is akin to driving by the rear-view mirror.

You won’t see the turn you should have taken until it’s too late.

A lot of small business owners look at their company financial statements only at tax time. Once per year. When it is way too late to use the information to help finish the year more productively.

The sideview window

In this analogy, you can see the edge of the road, and follow its turns if you react quickly enough.

Company owners who generate monthly financial reports, and digest their meaning, can make decisions based on what has recently happened in their business. They can begin to measure the effect of these decisions within a month.

This is an incredibly safer way to “drive”, especially when coupled with the longer-trend lessons of history. But it requires that your financial reports be configured to provide the key measures of productivity in your company.

And it still doesn’t let you see what’s coming.

Looking down the road

I advised my daughter to see it all – front, rear, sides – and “anticipate” what might happen down the road. Driving this way, she would be better prepared to adjust course, apply the brakes, or hit the gas pedal.

Likewise, companies who look down the road – who quantify their future with a month-by-month plan for sales, profits, and cash flow – are more likely to maximize productivity, seize opportunity, and minimize risk.

Virtually 100% of larger, successful companies manage this way. But few small companies do. And they often successfully remain, well, small.

A Future View of Your Business

The two resources mentioned above are proven to help integration companies “count & measure” past performance, in a way that helps them better understand their future. The final step is to look ahead and make a quantified “prediction” of future outcomes.

To help companies do this, my CFO Group for 2011 will be starting on Friday, September 17. We will be assessing what has happened so far in 2010 – and systematically applying those key measures to create a crystal-clear view of what can be reasonably expected in the coming year.

Stay tuned for more info in the next ACCELERATE.

May you Grow & Prosper!