Sunday, September 21, 2014

Home Magazine Keeping score

Keeping score

Columns - Industry Voices

Rather than focusing solely on a financial metric, it is advantageous for landscapers to adopt a more broad-based perspective of organizational goals.

Steve Cesare | October 10, 2012

Steve Cesare

More often than not, when asked to identify the company’s goals, a landscaper simply replies, “Make more money.” While that goal is noble, common and important, it does not fully address the company’s entire business scope. Singular focus on making more money is insufficient due to the fact that today’s landscape industry is characterized by multiple intangible features (e.g., competitor intrusion, antiquated business processes, employee safety) that can hinder a company’s long-term viability.

Rather than focusing solely on a financial metric, it is advantageous for landscapers to adopt a more broad-based perspective of organizational goals. To that end, the Balanced Scorecard represents a mature, comprehensive and clairvoyant approach to company goal setting. The Balanced Scorecard posits that for a company to maximize the likelihood of its long-term success, four concurrent goals must be identified, measured and tracked: financial, people, business processes and customer.


Financial. The Financial perspective is the traditional view of business success as defined by maximizing profit through aggressive increases in revenue coupled with strict cost containment tactics. This set of goals covers the company’s financial objectives and allows the landscape owner to monitor financial growth, effectiveness and value. For landscapers, a key financial metric would be company net profit. While these financial indices are summarized on the company’s monthly Profit and Loss Statement, they must be interpreted in tandem with the other three Balanced Scorecard factors.


People. This section of the balanced scorecard emphasizes the quality of employees, human resources programs and people systems designed to increase productivity, morale and retention. In this sense, landscapers must hire high-caliber employees and then train, motivate and develop them, so they will perform their duties in a safe, satisfied, and efficient manner. The people quadrant seeks to enhance value to the company by improving employee functioning through training, compensation and advancement, as well as by controlling people-based costs (e.g., workers’ compensation premiums.)


Business Processes. The business processes quadrant directs attention on how the organization is currently structured and operating by emphasizing the importance of keeping critical internal procedures efficient, non-bureaucratic and directed on attaining desired results. For landscapers, a common key process is purchasing. This quadrant is a key strategic driver of a landscaper’s success in that efficiency, quality, and better use of technology can save inordinate time, effort and money.


Customer. Here, landscapers must devote deliberate attention on improving the number and breadth of their customer base, and improving the authentic, personable and collaborative nature of their relationships with those customers.

During their annual business planning meeting, landscapers should consider their company’s size, scope and aspiration, and then select some of the abovementioned goals from each of the four quadrants. Once those goals have been chosen, the landscapers must then develop an action plan with specific initiatives to attain the goals and identify targeted metrics to track their progress.
 



Steve Cesare is an industrial psychologist with the Harvest Group, a landscape consulting group. Send your HR questions to cesare@gie.net.

x