Posts Tagged ‘financial control’

Incentives and Consequences

Monday, August 9th, 2010

Peter Drucker famously wrote, “What gets measured, gets managed.” A less noticed corollary is that, as Dr. Deming pointed out, what gets measured can drive unintended consequences.

This came to mind recently when several small business clients within a few weeks asked me how to reorganize as woman-owned businesses. It seems that the government, as part of a policy to encourage women entrepreneurship, incents them to form businesses by setting aside a percentage of some contracts for small companies that are 51% or more owned by women.

The policy has been apparently successful. From 1997 to 2006, the number of women-owned service businesses increased by 69% and retail businesses by 130%.

Only one problem. The numbers are suspect.

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Numbers, Business Owners, Blindspots, and Long Levers: How to Move the World

Tuesday, June 15th, 2010
The first focus area for many of my small business clients is numbers. Strategy, planning, research, personal and organizational effectiveness…nothing else matters if you aren’t in control of cashflow, margins, and so on. It’s a matter of needing to survive before you can learn to thrive.
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