The first step in a thorough 'reality check' financial planneris finding candid and honest answers to the following key questions:
Are most decisions and actions (especially the most important ones) in your organization based on facts, solid logic and common sense?
How comprehensive & efficient is your information & knowledge management system?
Is it focused on data, information or knowledge?
Is your data and information accurate, timely, reliable, comprehensive, sufficient, well-structured and easy to work with?
How well you, your managers and employees know the internal and external reality of your company (first and foremost, your key external factors)?
How accurate are their perceptions of this reality?
Question #3 requires certain explanation (i.e. definition of key knowledge management terms). Data is the 'quantum' of information (i.e. employee last or first name). Information is a meaningful set of data (such as a comprehensive description of a corporate client or supplier or any other stakeholder). Knowledge is information that has value to the organization in question.
Value of knowledge in question means that its discovery (or generation) to make better investment decisions and perform more effective action than in the absence of this knowledge. Quality of decisions and efficiency of actions are measured by financial and functional key performance indicators (KPI). Consequently, knowledge is information that has financial and functional (and hence emotional as better decisions and actions bring positive emotions to employees in question) value to the organization in question.
Reality check (as all other components of a comprehensive corporate audit) must be not 'static', but dynamic. It means that:
Detailed, substantiated and honest answers to the abovementioned six questions must be obtained and analyzed
Detailed conclusions must be made
Recommendations must be developed, accompanied by appropriate comments
Financial and operational plans for improving the corporate performance in terms of 'reality check' must be developed and implemented
Results of implementation of the abovementioned plans must be analyzed thoroughly followed by the appropriate conclusions, investment managerrecommendations and comments
