Do you measure what Matters?
Thou shalt measure what matters
Business owners and their teams spend way too much time being ‘in action’ and too little in the planning where they want to get to, and checking whether they’re making it.
Years ago my mentor Harry Palmer shared “If you don’t put a plan together before you head out from Los Angeles to Chicago, you could end up in Miami.”
I’m Linda Feinholz. I work with business owners who want more Control, Value and Freedom.
Working with over 200 companies over the years, I’ve seen leaders and teams on the road to Miami, problem solving day after day, but they wanted to get to Chicago.
What a waste of time, energy, brain power, resources. I don’t need to go on. Right?
There are 3 reasons why you need to set clear objectives
First, you need to set a purpose for the activities everyone is going to be participating in in your company. That means each one has a starting point, and end point and a time frame.
Second, you need to make the objectives measurable, and share them so that everyone whose work contributes to reaching them understands their role.
In business, if it doesn’t have a number, then it’s not a true goal nor a way of measuring progress along the way
One of the tools I give my clients is what I call the ‘vague words’ exercise. When they describe a result they want, they have to make it explicit, observable, measurable. The words more sales and more profitable aren’t goals. 13% more sales in our widget is a metric. 27% net profit is as well.
From there you can reverse engineer what each step and activity needs to be to reach that target. And you can assess how well each part of the process is working to reach it.
Third, you need to help everyone understand how to chart their own actual progress in contributing to getting the business those objectives so they’re not distracted by wondering if they’re making progress.
If you don’t take those steps, your team won’t be working on the right things, won’t know what others are working on, won’t know if their time and mindshare and energy is proving useful and valuable.
Everyone gets out of bed in the morning wanting to do their best work. It’s a human thing.
As a business owner your job is to set things up so that your team can do their best for your customers, their fellow members of the team, and the results your company wants to create.
So here are 5 key metrics things you, as a business owner should be setting and tracking for your company:
The first metric is Value – are the things you’re working on increasing the value of your business? That value, that reduction in risk is what your banker wants to see in order to make funds available for your business. It’s what outsiders like brokers and potential investors or buyers look as to see if you’re a better investment option for their time and attention and dollars than your competitor.
The second thing is Financial Performance – how are you doing in tracking and reporting what’s happening in the business? Are you achieving your financial targets? Are they relevant and useful for decision making and running your business?
Third is Leading Indicators – these are the signals that predict what’s likely to happen next in your business. Revenue indicators provide you with early signals of positive or negative future-revenue trends. These indicators help you plan and adjust your operations.
To change any current results in your business, you have to focus on the Leading indicators or measures. They are the things you can control and influence that will lead to a different result. For example, if the indicators signal declining revenues, you may increase your advertising or cut prices to drive sales. If the indicators signal increasing revenues, you may have to hire additional customer service staff.
Fourth is Lagging Indicators – These are the reports of past results that tell you specifically how things have gone.
And finally, Return on investment – you need to be constantly evaluating whether it’s been worth the investment of time, or money, or resources, or chosen opportunities, so that you can make well informed decisions about the next goal and next opportunity, over and over again.
With every one of my clients, we review annually whether the metrics being used are serving to predict and track what actually matters in the business. Sometime they’re changed for different ones during the year.
Remember the point of measuring what matters is that it steers your decision-making, action-taking and results. Do you know what measures matter in your company?
Your homework is to review a list of leading and lagging measures to refine the ones you’re using now. You’ll find it at OnDay91.com/measure . Grab it and sit down with your team to identify the ones you’re using now and which ones to use going forward.
And if you’d like to spend time with me increasing the control and value of your business, come join other business owners in my online Momentum Program. You’ll find information at OnDay91.com/momentum and can decide if its a fit for you.
I look forward to celebrating your success!
P.S. Whenever you’re ready… here are 4 ways we can help you stabilize and grow your business:
1. Grab a free copy of our Guide and Checklist
It’s the roadmap to creating a stable, scalable, valuable business that is so healthy you could be absent for ninety days and it would continue to thrive. — Click Here
2. Join the On Day 91 group and connect with business owners who are resetting and scaling too
It’s our new Facebook community where smart business owners learn to get more control of their business, value for their company, and freedom in how they use their time. — Click Here
3. Join our Momentum Program and be a Case Study
We’re putting together a new case study group at On Day 91 this month… stay tuned for details. If you’d like to work with Linda on your business-pivoting and growth plans… just send her a message with the words “Case Study”. — Click Here
4. Work with Linda and her team privately
If you’d like to work directly with Linda and the On Day 91 team to take you and your business to it’s next level… just send Linda a message and with the word “Private”… tell her a little about your business and what you’d like to work on together, and we’ll get you all the details! — Click Here