Take the company self-test

How is your company doing?

To answer this question, a self-test has been developed to quickly see if your company is in good shape or if measures are needed.

• If a 'yes' can be given to all questions, then the company has a grip on the most essential issues and is 'in control'.
• If 'no' is checked in one or at most two boxes, these are definitely early warnings that should be put on the action list.
• Two "no" boxes are not yet cause for great concern, as long as it is addressed.
• If there are more negative signals in the list, quick action with a strong approach is called for. The situation is worrisome and chances are that (future) shareholders, financiers, commissioners and other external stakeholders will be reluctant.

Strategy

It is crucial that the company's strategy is clear and up-to-date. Everyone in the company knows the strategy and applies it. It is also important that all decisions taken serve the realization of the strategy. In other words, a strategy must not only be there, it must be conscientiously communicated and consistently executed.

Present & current? Yes/No

Communicated? Yes/No

Consistently executed? Yes/No

Objectives

Is the strategy translated into clear, consistent and measurable objectives? Does everyone in the company understand what the objectives are and are all objectives also aligned and mutually reinforcing? Nothing is more destructive than people who are trying very hard, but whose efforts work against each other, or that the results are not easily measurable.

Clear? Yes/No

Consistent? Yes/No

Measurable? Yes/No

Cashflow

Although it sometimes seems that there is an infinite amount of money available in the world, controlling cash flow is vital for any business. Especially in the event that a higher cash-out than cash-in is anticipated in the short term. This starts with well-founded cash flow planning, combined with an adequate system to track it and predict and explain any deviations.

In order? Yes/No

To follow? Yes/No

To plan? Yes/No

Investment

Every company needs to invest, but in line with its strategy! It is therefore important that all investments are assessed against this, but also that a medium-term investment plan is in place showing that the necessary investments are financially sustainable and feasible. Also, the risks of each investment must be reasoned and financialized and the effects factored into the earnings forecast and cash flow forecast.

In line with strategy? Yes/No

Financially sustainable & feasible? Yes/No

Risks calculated? Yes/No

Management & Organization

Finally, we look at the quality of management and the structure of the organization, starting with the CEO and his/her team. Are we dealing with a self-critical CEO (not a Sun King) and a strong and balanced management team? The closing audit questions concern the quality of the administration and management information. Is it adequate and relevant?

CEO is not a Sun King or Autocrat? Yes/No

Good Management Team? Yes/No

Good administration and management information? Yes/No

If you answered 'no' more than you thought, call in an expert because you need help with one business unit or the entire company. Often there is late intervention, let alone asking for outside help. Very often a successful next big step is possible, but something must first be done or handled differently.

Under such circumstances, an interim CEO or CFO brings vision, peace and stability. From the Interim Management practice of Mandaat and JBR, we use this list of questions to assess whether a company is 'in control'.

Written by Jan Kalisvaart, Managing partner of Mandaat, for Brookz.

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