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16 February 2016
Management Control Systems


The essential guide to Starting Up & Growing your Business

Barrier 5 – Information Chaos

Growing a business is full of decisions, and if your decisions are not based on sound facts and figures then your bad decisions will lead to a halt or decline in your growth.  In my article Is Your Reporting Driving Your Business Forward?  I explained that the most effective managers see more opportunities and achieve greater performance by having data at their fingertips.  They rarely refer to gut feel and never rely on hearsay or rumour to know what’s going on in their business.

As a Business Owner, you must organise your information and data sufficiently to allow the Right Information to get to the Right Person at the Right Time.  You need to ensure your business decisions are informed and based on sound judgement.  We’ve all heard the horror stories (or you may recognise yourself here) of small business owners throwing all their receipts and bills into a shoebox, thinking they’ll sort it all out later, and rely on their long suffering accountant or bookkeeper to piece it all together at the end of the year, only to find out the business has made a loss.  I’ve also witnessed customer quotes scribbled on paper napkins, lost for weeks under piles of other serviettes, never converted into a sale and the customer long gone to the competitor.

Chaos Theory

Information Chaos causes confusion, and leads to complete disorder.  I worked with an extremely intelligent, highly mathematically minded CEO quite a few years ago, who kept trying to persuade me that the Chaos Theory – piles of paper on the desk in no particular order, and added to daily – was a good thing.  He tried to convince me that the laws of probability would make the most urgent and important items miraculously surface to the top and be attended to.  Needless to say they didn’t, and within three months of working with him his entire business affairs were neatly reined in to military precision filing systems, spreadsheets of data, and to do lists.

So what methods can you use in your business to make sure you’re on top of reality and making informed decisions based on objective, factual and timely information.

The Three C’s

For the information to be good, the source of your data must comply with the Three C’s – Correct, Current and Consistent.


Correct means that you’ve checked the data, and verified its accuracy before you input it into your systems.  To put it in polite language Rubbish In = Rubbish Out.


Set yourself, and your employees, standards of time frames, to ensure your information is up to date.  If this means setting aside two hours every week, on the same day, to input all your receipts and expenditure into your basic book keeping spreadsheet, then block that time out in your diary and make it happen.  Little and often will be far more effective than panicking six months down the line when you’re trying to work with old information.

If you buy in databases or marketing lists, make sure you also buy the updates on a regular basis, and clear out those clients who have requested not to be contacted or unsubscribed.


Consistent means the information you use is comparable, and everyone understands and applies the same definitions to information sources.  Setting up client databases is a typical example where consistency often goes by the wayside.  If lots of people are all using the same database, but nobody has defined exactly what data should be input into the different fields, as time goes by the database becomes contaminated and unusable.

Keep the data in one place and only give access to those employees that need to update or use the information.  Make sure staff are fully trained and understand exactly how the information should be input, give them written definitions of fields.  Above all let them see how the information is going to be used so they appreciate the importance of accuracy and discipline in their work, and what the impact of errors will be.


Don’t Get Personal

Another problem I’ve regularly come across is employees making information their own, rather than treating it as company property.  Many folders and files in the computer drives have meaningless names that give no clue as to what the contents are, or use the employees own names and individual referencing. This makes it impossible to find, or access if it’s password protected, if the employee is away on holiday, off sick or even worse has left the company.

If you want to find the sales records from the middle of last May for example, you would hope to find a folder called 2015 Sales Records, and open it to access files named 20150522 Sales (ie. 22nd May 2015).  Instead you find a folder called JOESTUFF full of dumped word documents, excel spreadsheets and other paraphernalia including personal piccies of his pet hamster and last year’s trip to Margate.

Sharing through cloud based software’s has made it so much easier for businesses to give controlled access to those people who need it, so that one source document can be updated by multiple users at the same time.  This technology avoids the need for infinite versions that are mistakenly saved back to the source document, overwriting other updates in error.


Design, Document & Comply

Company policies and procedures should define how information shall be created, managed, updated and archived in carefully mapped out computer drives.  To avoid Information Chaos, as a business you need to decide what the system or process will be, map it out and document it in detail – write the manual.   Then use that manual to communicate and train each staff member involved in those processes, making sure everyone complies and understands the importance of the process you want them to adopt.  Check staff are complying with it on regular intervals and do an audit every quarter, or half yearly, to keep your processes sanitized.

If the process or system changes, which it should do if you’re continually looking for ways to improve and avoid chaos, that’s fine – you just update the manual accordingly and communicate the changes through a Tool Box Talk or monthly training update session.

Fringe Benefits

There are fringe benefits to documenting your processes, systems and procedures.  ISO Accreditation or other Quality Certifications require written statements of your business procedures in a transparent and auditable format.  Get it right and you’ll be half way to achieving that accreditation.

When providing quotations, bidding or tendering you will stand out from the crowd, and give you competitive advantage, if you can present quality standards of how you manage your business.  These will clearly communicate the quality of service your clients can consistently expect from you.

And last but not least, if you decide to sell your business, your procedures will add significant value to your business for prospective buyers.

Next Week

Barrier 6 – People & Change  –  You cannot grow your business without the help of other people.  Continuing to run things as a small business as you get bigger doesn’t work.  Finding the right people for the job, delegating over to them, and learning to let go of the detail is critical for your business success.


Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the in-depth Alluxi Business Success Scorecard delving into the 10 key critical success areas.

Take 15 minutes to respond to the scorecard and get your results within minutes.  You’ll have the opportunity to book a follow-up Productivity to Profit Breakthrough Session to find out how you can implement rapid and measurable improvements.