There is nothing worse than not having control, no matter what the circumstances.
People often ask: “Should I be monitoring my businesses by methods other than if we are ‘busy’ or not;
“What should I be monitoring’
“How regularly should I be monitoring”
The response is simple. Imagine having a navigation system designed for your business which keeps you informed of how your business is tracking at any point during the year??? Well…
……..Consider the following analogy….
When asked how man got to the moon in 1969 most people assume the spacecraft simply travelled in a straight line between the earth and the moon. The records show something entirely different, that flight was on course just 3% of the time. So 97% of the journey was spent off course and they still achieved their goal – how was that possible? Simple…. ‘Check & Correct’.
That flight crew had to monitor every aspect you could think of; fuel, burners, equipment, oxygen, air temperature, travel speed, you name it – at every moment. So all they did was continually check and then correct to get back on course. The entire flight from take off to landing on the moon was spent checking and correcting to guarantee they achieved their goal.
How do you stay on course in your business?
In business the instruments, gauges and gadgets those astronauts were monitoring are called ‘Key Performance Indicators’ (KPI’s). The power of KPI’s comes from a simple concept – What you can measure you can manage.
KPI’s mean you know where you stand at any given moment and can adapt or change your strategy to improve your results right there and then. It’s like taking the pulse of your business. So instead of waiting for quarterly figures to discover your productivity was down or your marketing and sales process aren’t delivering – know day-by-day or month-by-month and adapt as you go. Knowledge is the power that drives better results.
What are your Key Performance Indicators?
They might be:
- number of leads you generate each month
- How many leads you convert into sales
- average transaction value per customer
- the number of sales compared to available capacity
- productivity compared to capacity
- number of items or services sold per customer
Ideally your KPI’s need to be tailored to your business and should track those things that clearly tell you at a glance how your business is performing. Conversely if you’re not measuring your KPI’s how will you know if you’re on or off track at any given moment?
If you don’t know the answer to that question it’s unlikely you’ll achieve your goals. Think of it this way, if those astronauts were not checking their course KPI’s and making appropriate corrections, man wouldn’t have made it to the moon.
Another analogy can be drawn to boating. Any experienced boat person knows it’s critical you determine the true North position. Perhaps not so critical over very short distances, where sailing say 3 degrees off true North will not pose such a huge problem. However, if you sale slightly off course for weeks on end, it could result in being lost at sea.
Too often, this happens to businesses, and contributes to the sad statistic of why the failure rate of new businesses is so high.
What are you failing to achieve or rectify because you’re not monitoring your KPI’s?