In today’s fast-paced business world, most companies use some sort of dashboard or flash report to monitor and improve productivity and other key performance indicators. Despite their wide use, many are still confused on what exactly should be measured and what constitutes a key performance indicator.
Using Flash Reports to Improve Productivity
What often happens is the CFO/Controller throws in any indicator that might be important just to cover their bases. Unfortunately, the report may become too detailed to prepare quickly. And it will loose its usefulness. Eventually, either you stop producing the report or the CFO or Controller only looks at it. In order to drive productivity, all key team members must review the report and take action on the results.
Here’s a helpful video of three things you should know about preparing a flash report.
1. Measuring Productivity Is Often The Most Important Section
When you identify 2-3 measurements in volume, you can have an exponential impact on your profitability. Although measuring productivity is the most difficult part in a flash report, get operations involved to get the key drivers they use to run their part of the business.
2. Go Back to the Financial Projections to Identify the Drivers
In building the financial models, you have already identified the drivers connected to profitability. By performing a sensitivity analysis on those key drivers, you can identify the most impactful drivers in your company. Limit the number of drivers to 2-3.
3. Give the Flash Report to Everyone in the Organization
Most companies limit the flash report to the top management in the company. Instead, give the flash report to everyone in your organization. Let them know how each employee can personally improve profitability and their job performance.
If you want to learn more financial leadership skills, then download the free 7 Habits of Highly Effective CFOs.