Experienced CFOs know the best metrics to use for growth, productivity, profitability, leverage and liquidity. But which single metric is the most meaningful?
In his book “Beyond Entrepreneurship 2.0,” author Jim Collins suggests there is one metric that towers above all – the percentage of Right People in Key Seats (or RPKS % for short).
Collins writes that the top priority of business leaders should be to assure that at least 90% of the key seats in your organization are filled by the right people. He defines “key seats” as positions with the influence to either, put the organization at risk, or drive the long-term success. Collins also offers seven questions to ask to help you determine if you have the “right people” in the key seats.
From a CFO’s perspective, RPSK % is meaningful because we know that it’s the people on your team that produce the results reported on your financial statements. We know that the RPSK % also provides a lens for reviewing the bevy of metrics that your CFO can provide.
In other words, you can add some objectivity to the RPSK % calculation by combining a CFO’s bevy of metrics with Collins’ subjective “questions-based” approach. For example, growth metrics can help you determine if you have the right people in your sales leadership seats. Productivity metrics can help you determine if you have the right people in operational leadership seats.
How We Can Help
Business owners can benefit from working with one of Florida CFO Group’s experienced CFOs to run through a calculation of your RPKS % using both Collins’ questions and the CFO metrics.
Contact us so we can work with you to elevate your business!