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Harnessing Process™ Financial ManagementThe single most important element of deciphering an organization’s culture is to gain a clear understanding of its revenue streams. Over time, the nature, viability, and sustainability of its revenue streams and the pressure of expectations exerted by customers and other forces in the business environment can have a profound effect (positive or negative) on the characteristics of an organization’s culture. The Breckenridge Financial Indicator™ to benchmark your organization’s performance against standard measures defined by Dun and Bradstreet and for companies within your SIC Code. There are fifteen ratios that are calculated from financial information submitted to the Breckenridge Institute and are plotted over a period of five years to show trends. The ratios evaluate three aspects of your organization’s financial situation:
The benchmark data indicate what the ratio should be in a “well-run” organization, but we present guidelines and explanations for interpreting each graph because your organization may have unique underlying factors that make it different from the norm. The Dun and Bradstreet ratios show relationships between line items on your organization’s balance sheet and consequently are two-dimensional. When the Institute links these ratios to the quantitative scores on the Breckenridge Culture Indicator™, they become a three-dimensional snapshot of your long-term financial and non-financial performance. The Breckenridge Financial Indicator™ also evaluates financial performance in areas that do not show up on financial statements. For example, the analysis of an organization’s financial performance on items such as its top customers, top expenses, and employee retention can reveal underlying cultural assumptions and patterns of spending that may not be revealed in more traditional financial analysis. The Institute also uses the indicator to evaluate the financial impact of cultural misalignment between leaders, managers, and staff members. When leaders, managers, and staff with differing views pull in different directions its like driving a boat full throttle with the anchor dragging along the bottom, or driving a car with one foot on the gas and the other on the brake. If each employee in a twenty-person organization squanders one hour of time or energy per day on such misalignments, it could cost the organization as much as $150,000 per year. Some organizations squander up to two or three hours of energy per day on rework, work-arounds, downtime, inefficiently run meetings, and endless e-mails, which equates to about $440,000 per year – a hidden cost that’s rarely seen on a balance sheet. Minimizing squandered energy and redirecting it to achieve an organization’s goals and objectives is perhaps the most tangible return on the investment of learning how to harness the invisible power of culture. Personality in Context™
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