I have always worked on the principal with management reporting, that if I was down to my very last sheet of paper and my life depended on it, how would I convey the right message to the decision makers.
In this respect reporting is highly creative.
Management reporting, that is, not reporting compliance where accounts are prepared using common standards to remove inconsistencies from country to country and Auditors then examine the accounts to provide assurance that these standards are being followed. Compliance is more about accuracy and adherence with a historical focus. Essential and skilful, but not strategic, insightful, and future focused like management accounting.
When designing a good management report, in addition to having bullet-proof numbers you must:
- understand the audience
- structure the information to make it easy to understand
- anticipate any queries and be proactive
Often existing, lengthy reports are the legacy of numerous ad-hoc requests by Directors to add a new schedule here and there. Additional information is easy to add, but nobody ever removes and then nobody has time to read and work out it is the same information, just formatted differently. After all, there is only so many ways you can slice up an apple.
Albert Einstein once said, “If you can’t explain it simply, you don’t understand it well enough.”
To make a change to the agreed ‘one-pager’ other stakeholders input on requisite content should be sought, before issuing a draft format of what the proposed 1-pager would look like, sort of road-testing and then Directors reaching a new consensus that this new version will be the new one-pager. Maintaining a good ‘1-pager’ then becomes an exercise in discipline, cohesion, and prioritising. If something new is proposed, something old needs to be dropped to make room for it. Ongoing feedback and communications play a huge role here.
I love how dashboards can virtually stream information live to managers, but you must understand the correct drivers of the business to monitor. A good-looking dashboard reporting on unnecessary metrics is a waste of time.
There will always be a need to dig deeper and provide supplementary detail if required but sending this out as a standard reporting package overwhelms the end user, taking the focus away from the message you want to convey.
I have had a lot of success with the one-pager over my career. It will take a few months to change things around if you are not yet at that point, but the effort will pay dividends later. Stick to the one-pager principal and you will soon find your top-level conversations assume a more strategic flavour.
Reporting is one of the 5-Pillars of the Profit Metrics methodology. For more information about Profit Metrics, please click here