Measuring Business Performance

If your controls only exist for the auditor, you don't have controls. You have theatre. And a lot of organisations have more of it than they realise. A control can be documented. Tested. Reviewed. Signed off. Reported as operating effectively. And still fail to change behaviour when it matters. That is the uncomfortable bit. Because control value is not created when evidence exists. It is created when the control improves a decision, prevents a bad outcome, clarifies ownership or changes how people act under pressure. A control that only works for the audit file is not a control. It is performance. The real test is different: ✅ Does the control change what someone does? ✅ Does it create useful friction before a poor decision is made? ✅ Does it clarify who owns the risk? ✅ Does it produce evidence that helps management act, not just audit test? ✅ Does it still work when the business is busy, stretched or under pressure? If the answer is no, the issue is not documentation. It is value leakage. That is why I created the free Beyond the Lines™ Internal Audit Value Leakage Map. It helps audit, risk and controls leaders diagnose where value disappears between insight and action, including where controls look fine on paper but fail to create real ownership or outcomes. 👉 You can access it here: https://lnkd.in/er_NbN-m 🗣️ Where do you see the most “control theatre” in organisations? Policy, evidence, sign-offs, remediation, reporting, or somewhere else? #InternalAudit #RiskManagement #InternalControls #Leadership #Audit

Most internal audit reports are thorough, detailed… and underutilized. Why? Because decision-makers don’t need more pages. They need clarity. This is where a high-level audit dashboard changes the game. A powerful one-page dashboard can: ✔ Highlight critical risks instantly ✔ Show what truly matters to the business ✔ Drive faster, better decisions ✔ Strengthen Audit Committee engagement ✔ Create accountability for action Frameworks like the Institute of Internal Auditors emphasize effective communication as a core pillar of Internal Audit. And in today’s fast-moving business environment, visual storytelling is no longer optional. From my experience, the real value of Internal Audit is not in identifying issues, it’s in ensuring they are understood, prioritized, and acted upon. A well-designed dashboard typically answers: 🔹 Where are the biggest risks? 🔹 What needs immediate attention? 🔹 Are issues recurring? 🔹 Who is accountable? 🔹 What is the business impact? When done right, it transforms Internal Audit from "a reporting function" to "a strategic decision enabler". One page. Clear insights. Real impact. #InternalAudit #RiskManagement #CorporateGovernance #AuditCommittee #DataVisualization #Leadership

Our work as an internal auditors is like an iceberg. Only a small portion is visible: The reports, the assurance services , the advisory outputs. But beneath the surface lies the real effort: * Managing resistance to change * Conducting deep risk assessments * Following up on complex findings * Working within tight timelines and limited resources * Performing data analysis and root-cause investigations * Addressing knowledge gaps across functions * Navigating ethical dilemmas * Balancing expectations while maintaining independence Internal audit isn't just about pointing out issues it's about: ○ Strengthening processes. ○ Enabling better decisions. ○ Supporting sustainable growth. The visible tip may be small, but the value beneath is what keeps organizations afloat.

Are you measuring what matters in your organization? A comprehensive measure of organizational effectiveness includes much more than profit margins and growth rates. The market and media often celebrate companies that show rapid financial growth or high profitability, leading to a cultural bias towards these metrics as signs of success BUT the tide is slowly turning- more businesses are recognizing the long-term value of a holistic approach to effectiveness and success. Many more businesses are embracing the concept of the "Triple Bottom Line," which measures success not just by financial profit ("Profit"), but also by the company's impact on people ("People") and the planet ("Planet"). HOWEVER 🚨 There is more work to be done! The prioritization of non-financial elements of organizational success can get pushed aside when financial pressures hit or quick results are valued. You have probably heard the phrase "What gets measured gets managed". This is generally true. Quantifying and measuring non-financial aspects of effectiveness, such as employee well-being, social impact, and workplace culture, is hugely important but remains challenging. 💡 Here's some straightforward steps to move you towards a more holistic approach to measuring success: 𝐒𝐭𝐚𝐫𝐭 𝐰𝐢𝐭𝐡 𝐜𝐥𝐞𝐚𝐫 𝐠𝐨𝐚𝐥𝐬: Define what holistic success means for your organization. This could include specific targets related to employee well-being, social impact, and environmental sustainability. 𝐄𝐧𝐠𝐚𝐠𝐞 𝐬𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬: Talk to employees, customers, and community members to understand what aspects of your business matter most to them. Their insights can help shape your holistic success framework. 𝐂𝐡𝐨𝐨𝐬𝐞 𝐫𝐞𝐥𝐞𝐯𝐚𝐧𝐭 𝐦𝐞𝐭𝐫𝐢𝐜𝐬: Based on your goals and stakeholder feedback, pick metrics that are meaningful and manageable. For example, employee satisfaction can be measured through regular surveys, while environmental impact can be tracked through energy consumption or waste reduction metrics. 𝐔𝐬𝐞 𝐞𝐱𝐢𝐬𝐭𝐢𝐧𝐠 𝐟𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤𝐬: Look into established frameworks (like GRI or B Corp standards for sustainability; Gallups Q12 Engagement Survey for employee engagement or the Denison Organizational Culture Model to measure workplace culture). There are existing frameworks for most known elements of organizational effectiveness so it's just a matter of looking into them. 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐞 𝐢𝐧𝐭𝐨 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧-𝐦𝐚𝐤𝐢𝐧𝐠: Ensure that these holistic metrics are part of regular business reviews and decision-making processes, not just side projects. 𝐑𝐞𝐩𝐨𝐫𝐭 𝐭𝐫𝐚𝐧𝐬𝐩𝐚𝐫𝐞𝐧𝐭𝐥𝐲: Share your progress openly, including both successes and areas for improvement. Transparency builds trust and credibility. 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐥𝐞𝐚𝐫𝐧𝐢𝐧𝐠: Be prepared to adapt and refine your approach as you learn what works and what doesn't. This is a journey, not a one-time task. #organizationaleffectiveness #measurewhatmatters #leaders

Can you explain what happened here? If you can't, your business may be in BIG trouble. If you work in strategic finance, understanding how to comprehend + explain financial data is not a nice to have...it's a MUST. It doesn't matter whether you are presenting to leadership...the board of directors...or investors. If you don't have a tight grip on your data, you'll be faced with some catastrophic surprises. Let's learn how to interpret + present this by walking through this report together 👇 ➡️ PROFIT & LOSS SUMMARY Your P&L might look decent at first glance... We beat our bottom line net income by 14% 🙌 But a closer look reveals some important details... - Revenue is down 10% ($50K below budget) This is a pretty alarming metric and may mean that your assumptions are too aggressive here. Was it because your conversions rates were lower than expected? Was churn higher than expected? - COGS is actually BETTER than expected by 40% This makes sense...your revenue was lower, so your COGS should also be lower. But there's something more interesting to address here... your gross margin was 80%, compared to your projected 70%. While the variance is favorable it highlights an important question - do you have a strong grip on your unit economics? - Operating expenses are 10% favorable compared to budget. That's good...but why? Which accounts? Was it timing? Was it a change to your plans? - Net Other Income was -$10k compared to your projected +10k. Accounts here typically relate to interest income/expense, depreciation/amortization, and non core business activity. Although $10k may not seem like a lot, it warrants an important analysis This all leads to a $15k favorable net income, which is 14% higher than expected. All done with our analysis? Not quite... We've analyzed the PROFITABILITY of our business, now it's time to analyze our CASH FLOWS ➡️ CASH FLOWS SUMMARY This is where things get puzzling: - Collections are down $70k (78% below target 🤯 ) - Inventory up by $20k over budget - Total cash flows is $35k below budget Woah! We beat earnings but missed our cash flows by 27%?? Believe it or not, this story happens all the time...and it's up to you to see the forest beyond the trees and take action QUICKLY. ➡️ PUTTING IT ALL TOGETHER Your P&L is looking OK, but there are some strong indicators that you don't have a grip on your unit economics, and your revenue projections may be a bit overstated. But the biggest issue by far is your cash flows. You were supposed to collect $90k more than you invoiced this month but instead you only collected $20k. If you have $1m in the bank that may not be too material. But if you have $200k in the bank? Now things get more dangerous. That's why it's CRUCIAL to review this report each and every period - you don't want to be taken by surprise. === How would you interpret these results? What actions would you take? Share your analysis in the comments below 👇

Guten Tag from Europe, where there’s an important contribution today to the debate about making the continent more competitive. Not only do we need to boost growth and productivity, we need an unprecedented degree of investment to stay resilient and relevant. A competitive and robust European banking sector is essential to fund this. This is a topic I have championed for years, and I am pleased to see a new report from Oliver Wyman and the European Banking Federation makes a timely contribution to this critical debate. One statistic lays bare the scale of what we’re facing: Europe faces an annual investment gap of €1.4 trillion to finance our collective digital, security and sustainability ambitions. Yet, as the authors rightly recognise, our issue is not a shortage of capital, but the barriers that prevent it from being deployed effectively. These include a fragmented and overly complex framework for financial markets as well as banking regulation that is too focused on risk avoidance, but not enough on also enabling growth. For years, I have said that regulation, while necessary for stability, in some cases overshoots the mark, weakening European banks in global competition. If we continue like that, we will deprive our economy of urgently needed capital to fund our ambitions. The report reinforces this view, showing how layers of complex and overlapping rules constrain European banks' ability to support the investments that are vital for innovation and competitiveness. This study comes two years after the landmark Draghi report made many similar points. Now we need bold, decisive and urgent action. It is encouraging to see the so-called E6 (Germany, France, Italy, the Netherlands, Poland and Spain) determined to go ahead with the Savings and Investment Union. Ideally, Europe as a whole should come along, because we cannot afford to wait. The report’s seven recommendations provide a clear roadmap, focusing on critical levers such as: ➡️ Rethinking how capital requirements are calculated, removing overlaps and duplications, and ensuring they are appropriately calibrated to the level of risk in order to expand financing capacity ➡️ Deepening capital markets to convert Europe’s idle savings into growth through a genuine Savings and Investment Union and accelerating reforms to boost the use of securitisation by banks to recycle capital into new lending ➡️ Fostering scale and integration by removing barriers To be clear: this is not a call for deregulation. It is a call for a smarter, more efficient, and coherent framework that preserves resilience while enabling growth. The cost of inaction is lack of growth and declining relevance. Europe has the capital and the innovative companies, and the banks to succeed. We need action to connect them. You can find the report here https://lnkd.in/gJjb7VYS

How did Dhruv Kohli raise 30cr at 110cr for his brand Boba Bhai from Sharks and from seasoned investors like 8i Ventures Titan Capital along with us at DeVC 🍔🚀 It comes down a razor sharp focus on the numbers that matter when running a Quick Service Restaurant (QSR) or a dark kitchen. It isn’t just about serving great food—it’s about making the numbers work. Here are three key metrics that separate the best from the rest: 1️⃣ Sales per Square Foot: The True Efficiency Test 📏💰 Every inch of space needs to work hard in a QSR or dark kitchen. Unlike traditional restaurants that focus on ambiance, these models maximize revenue from every square foot. The higher the sales per sq. ft., the better the efficiency—think McDonald’s vs. a slow-moving café. 2️⃣ Payback Period: The Faster, the Better ⚡💵 A great food business isn’t just about good margins; it’s about how quickly you get back your investment. The best QSRs and dark kitchens aim for a payback period of under 18 months—meaning they recover their setup costs fast and start making real profits. 3️⃣ Customer Retention: The Secret Sauce for Longevity 🔁❤️ One-time sales don’t build great food brands—repeat customers do. High retention means your food, pricing, and delivery experience are on point. If customers aren’t coming back, you’re just burning money on marketing. The best QSR and dark kitchen brands like Boba Bhai nail all three. High sales density, quick payback, and loyal customers—that’s the formula for a winning food business. 🍕🔥 Would love to hear from founders in the space—what’s worked for you and what do you struggle with? ⬇️

Internal Audit with Zero Findings: Success or Missed Opportunity? This is a question many auditors avoid, but it is one of the most important tests of audit maturity. The value of Internal Audit is not measured only by the number of findings. It is measured by the quality of insight we provide, the clarity we bring to decisions, and the confidence we give leaders about how systems work. When an audit results in “NO FINDINGS” it does not mean the assignment had no value. It means the auditor must go deeper and explain what they observed, what they validated, and where the organization is performing well. Good auditors do not search for faults; they look for understanding. A strong “NO FINDINGS” report should include: 🚥Confirmation that key risks are being managed effectively. 🚥Assurance that controls are functioning as intended. 🚥Insight into why the area is performing well. 🚥Suggestions to preserve or enhance what is already working and 🚥Opportunities to anticipate future risks before they emerge 🚥Recognition of teams that demonstrate strong practices Internal Audit is not a fault-finding exercise. 🚩It is a learning exercise. 🚩It strengthens confidence, 🚩improves decisions, and 🚩helps the organization move forward with clarity. A “no findings” audit can be one of the most valuable reviews, if the auditor knows how to turn assurance into insight. No IIA Standard says Internal Audit must find issues or findings. The Standards focus on: 🚩providing assurance, 🚩offering insight, 🚩adding value, and 🚩supporting decision making. A “no findings” audit is fully valid if the report clearly communicates why controls are effective and what the organization is doing well.

𝗜𝗱𝗲𝗮 #𝟭𝟲: 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 𝘁𝗵𝗮𝘁 𝗺𝗮𝘁𝘁𝗲𝗿: 𝘁𝗵𝗲 𝗯𝗲𝗮𝘂𝘁𝘆 𝗼𝗳 𝘀𝗽𝗶𝗹𝗹 𝗮𝗻𝗱 𝘀𝗽𝗼𝗶𝗹 I worked with a hotel chain that was focused on two high-level KPIs: 𝗮𝘃𝗲𝗿𝗮𝗴𝗲 𝗿𝗼𝗼𝗺 𝗿𝗮𝘁𝗲 (𝗔𝗥𝗥) and 𝗼𝗰𝗰𝘂𝗽𝗮𝗻𝗰𝘆 (%).  Occupancy was around 80% and had increased year on year but this aggregate average was hiding significant opportunities. When we de-averaged the overall occupancy by hotel and night, we discovered that very few hotels were 80% full: most were either completely full or only half full.  We reframed performance using two “failure metrics” (see illustration): • 𝗦𝗽𝗼𝗶𝗹: measured empty rooms (by hotel, by night). • 𝗦𝗽𝗶𝗹𝗹: measured “lost trading days” when a hotel reached full occupancy too early. By analysing 𝘀𝗽𝗶𝗹𝗹 𝗮𝗻𝗱 𝘀𝗽𝗼𝗶𝗹 𝗮𝘁 𝗮 𝘀𝗶𝘁𝗲-𝗻𝗶𝗴𝗵𝘁 𝗹𝗲𝘃𝗲𝗹, we uncovered significant value: • Spoil caused by pricing too high or insufficient marketing.   • Spill caused by pricing too low or overmarketing.   𝗦𝗽𝗼𝗶𝗹 𝗶𝘀 𝗮 𝗳𝗮𝗰𝘁. 𝗦𝗽𝗶𝗹𝗹 𝗶𝘀 𝗮 𝗺𝗼𝗱𝗲𝗹. One measures what you wasted; the other estimates what you missed.   The principle applies to almost any decision made under uncertainty: where there’s finite capacity and variable demand, there’s always a 𝘀𝗽𝗶𝗹𝗹-𝘀𝗽𝗼𝗶𝗹 𝘁𝗿𝗮𝗱𝗲-𝗼𝗳𝗳.  I’ve applied this framework across a diverse range of businesses: • 𝗖𝗮𝗹𝗹 𝗰𝗲𝗻𝘁𝗿𝗲𝘀: spill = calls with no agents (missed sales); spoil = agents with no calls (wasted labour). • 𝗥𝗲𝘀𝘁𝗮𝘂𝗿𝗮𝗻𝘁𝘀: spill = understaffed hours (poor service); spoil = overstaffed hours (low productivity). • 𝗦𝘂𝗽𝗲𝗿𝗺𝗮𝗿𝗸𝗲𝘁𝘀: spill = missed sales (poor availability); spoil = waste (over-stocking). Every business wrestles with these two-sided costs – the 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗲𝘅𝗰𝗲𝘀𝘀 and the 𝗰𝗼𝘀𝘁 𝗼𝗳 𝗺𝗶𝘀𝘀𝗲𝗱 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝘆.  Once you measure both, you can manage the balance intelligently.  The best metrics don’t just describe performance – they expose 𝘧𝘢𝘪𝘭𝘶𝘳𝘦 𝘮𝘰𝘥𝘦𝘴 that can actually be fixed. Key takeaways: • Analyse at the most atomic level that could be actionable (hour, site-night, SKU-store, agent, keyword etc.) • Define the acceptable 𝗴𝘂𝗮𝗿𝗱𝗿𝗮𝗶𝗹𝘀 for that atomic outcome.  • Systematically analyse the distribution of performance outside guardrails. • Recognise that averages hide opportunities where good and bad performance offset each other There’s a fascinating 140-year history of optimising these decisions which are commonly referred to as Newsvendor problems – but that story deserves its own post.

This test predicts your promotion better than your performance review: If your week is full of fires, crises, and emergencies, read this carefully. Because once you hit Director, the system stops rewarding the behaviors that built your career. And that’s where most high performers get stuck. Here’s the uncomfortable truth: If leaders see you as the fixer, the firefighter, the reliable operator... you are being valued, but you are not being promoted. VPs don’t get rewarded for solving problems. They get rewarded for preventing them. They’re assessed on: • Judgment • Clarity • Systems they build • Outcomes they drive through others Not how many messes they personally clean up. So if you’re always the one jumping in to save the day, leaders have mentally filed you under execution, not executive. Here’s the test that tells you exactly where you stand: Open last week’s calendar. Tag every meeting with one of these: D = I was driving a decision O = I was owning the outcome E = I was executing or supporting Now count them. Most reliable doers are shocked by how heavily their week skews toward “E.” And that data explains exactly why the promotion conversation hasn’t moved... no matter how hard you work. If you feel stuck, don’t blame your performance. Check your calendar. It’s a clear mirror of how the organization currently sees you… and where you need to shift next.