"What gets measured, gets managed" said management whiz Peter Drucker. But is it that simple?
Here at Think Forwards you will hear us use the words sustainable growth fairly often and we believe that sometimes you can't measure what is right. Treating your customers, suppliers and employees in the right way, which allows you to grow your business in a sustainable manner; well that is hard to measure. It might be that you have to go an extra mile for a small customer, the numbers tell you that they don't make much profit for you (yet) but sometimes you just have to do what's right. You never know what the future holds. What gets measured, gets managed isn't always black and white!
However, we also believe that having metrics that you can measure should have a place in every business. Just the process of thinking about what you should be measuring is immensely valuable - have you done this recently? In 2018, we are overwhelmed by data, we have access to numerous online tools, with vast amounts of data all of which has the potential to be incredibly insightful but only if used in the context of understanding what data has the potential to drive your business forwards. Have a think about the following:
1. Is it good, accurate, timely data?
2. How does the data impact your business, in the short, medium, long term?
3. What do you need to change in your business to drive that data in the right direction
4. Does your business understand why this is important?
Our recent blog post looked at 5 of our favourite KPIs, but probably more important than the KPIs itself is the process of setting them and the process of managing them once set. KPIs are only going to be useful if embraced by the whole organisation, communicated well and then the business activities that drive those KPIs are managed. Often this final and most important step is missed, and once set the KPIs may be reviewed, but no action taken.
One of the reasons I set up Think Forwards was not only to help businesses understand their numbers, but also to help business leaders understand which numbers are important, what will drive their business forwards and what changes need to be made in the business to impact those numbers in the right direction.
I hope you've found this article interesting, if you'd like some help taking time out from the day to day running of your business to look at what you can measure, and how you can manage it, we'd love to help.