You can’t manage what you don’t measure...
Last week, I was at an advisory board meeting for one of my new clients. This client has two different divisions with two separate operating managers and it was the first time both managers were presenting together.
The first manager went and listed out several dozen monthly numbers for sales and expenses. She had nice graphs showing lines going up and to the right. Many of them had rolling averages and YTD comparisons that made everything look very successful.
The second manager went and presented a completely different set of numbers with different charts and different comparisons. Some of which looked better, others of which looked worse.
The advisory board began asking some questions, but it quickly became apparent that nobody could make sense of the situation or really understand what was happening in either division.
The two sets of information were from the exact same company, using the same business model, just selling to two different markets. They were using very different numbers and metrics to measure the business, which was making it impossible to comprehend the situation.
Unfortunately, this is not uncommon. It’s easy to print out reports for accounting systems and make pretty charts and graphs that look like things are going swimmingly.
When we started to dig into the numbers, we saw some key information about what was actually happening in each division. We found important differences in their operations and performance.
The fact remains: you can’t manage what you don’t measure.
In this case, the “what” was undefined. And by defining a handful of important measures that drive your business— inventory turn, gross profit margin, cost of sales, and warehouse labor to name a few—you can keep an eye on the metrics that matter most to your success.
Recently, I wrote an article for Inc.com about several key metrics that any business can use to create insight on performance.
While every business will have several unique metrics based on their model and strategy, these are five that can be used in just about every situation.
Here is the article…
Don’t have a good set of metrics for your business?
Start with the five in the article, then ask yourself: what is key to our success? Create a list and select the top 8-12 to look at daily. Adjust them as you see new insights and as your strategy develops.
Need help? Send me your list and we’ll jump on the phone for 30 minutes. I’ll help you select the best ones for you situation. Click here to book a time in my calendar.
Bruce
bruce@eckfeldt.com
Cell: 917-385-7330
P.S. As Lou Holtz famously once said, “In this world, you're either growing or you're dying so get in motion and grow.” Whenever you’re ready... here are 4 ways I can help you grow your business faster, and with less drama:
1. Take the Growth Readiness Assessment
Download the 24 questions, send me the results, and set up a free one-on-one call to review the results and identify where you can accelerate your growth with the right focus. - CLICK HERE
2. Come to my one-day Planning Intensives
About once a month, I hold a one-day intensive for Founders/CEOs to help them find the current bottleneck in their business and develop a 90-day plan for breaking through it. The in-person intensives are held in Manhattan, but we’re scheduling virtual programs, too. - CLICK HERE
3. Try my Leadership Team Intensive
Every team can get into a rut—leadership teams are no exception. My half-day intensive helps the top team take a step back and see what’s working, what’s not, where they can develop new, better habits, and where they can break old ones that aren’t working. It’s like a B12 booster for your entire company. - CLICK HERE
4. Let me facilitate your next annual or quarterly planning meeting
Want to kick your planning sessions up a notch? Have me come in and we’ll work together on your annual or quarterly plan. Set goals that will really drive strategy, and create an action plan that will make sure everyone has clear accountability for results. - CLICK HERE