Several years ago, an HVAC company in Southeast Michigan was growing rapidly — faster than they ever had before. They were anticipating future changes throughout the company and adjustments in the Accountability Chart to help grow and place staff.
But something was wrong, and it would dramatically affect the course of their business.
Heading for the Cliff
I vividly remember in one Quarterly Session, we came together and for the first time their backlog was down. They didn’t hit their projected amounts in the Scorecard. There was a softening in the economy and it was rapidly affecting their industry.
We had to confront the truth about where they were really at, and where they were headed. Until that moment, the leadership team had expected to see a continuation of the upward trend the company had been experiencing. Now it seemed that assumption wasn’t necessarily reality, and the organization was in danger of falling off the cliff.
When we reviewed the previous quarter — especially their financial results — the conversation immediately went to the issue of their low backlog. So we took a review of their company scorecard right then and there. It was true, there was a significant downward trend of their backlog that needed to be addressed right away.
Reviewing the V/TO™, we reaffirmed their vision and plan for the year. We also talked honestly about how far off they were projecting their 1 Year Plan to be. It became evident that this was clearly the Number One focus going forward — all hands on deck, right now, while they could still impact their future financial performance before it was too late.
Resetting Future Plans
Leading indicators revealed that the company’s rate of growth was decreasing. While they were still growing, their year-over-year and quarter-over-quarter rate of growth was slowing down tremendously. Tracking these Scorecard numbers helped us to opt to wait on some of the hiring and to restructure the business appropriately, so that they could stay profitable.
Based on the evaluation, we reset our approach and created new Rocks to accomplish the changes they would need to make right away:
- They made strategic layoffs.
- They restructured two departments to align with the current level of business.
- They focused on filling their pipeline and backlog again.
That 90-day world of EOS kept the company from falling off the cliff. Six months later, my client ended the year with a sizable profit. If they hadn’t reset their Rocks when they did, the company would have continued planning for the growth path and they would have suffered a major financial loss that year.
While the organization did have to make some staff cutbacks on part-time positions, they were able to remain healthy for the bulk of their people.
The Immeasurable Value of a Quarterly Cadence
That’s the value of the 90-day world. It provided the leadership team with a reflection point to step back from the business and reevaluate where the company was headed.
That quarterly cadence is so incredibly important. It forces you to step back from your business and reevaluate where you’re headed. You may need to face some unexpected realities and make changes midway through your 1 Year Plan.
What is your company doing to make sure you can reset when you need to?
Learn more about how to get the most out of EOS. Download a free chapter of Get a Grip.