Benchmark Business Group

How Do You Know You Are Getting There?

January 26, 2016

"What gets measured gets managed." -exact source ironically not recorded

What is the point of measuring things in your business? What are things that should be measured? What about things that cannot be measured? What are your benchmarks for knowing your business is on track? Good questions. In fact, these are critical questions for your business, at least if you expect to meet your goals.
 
What is the point?
Most business owners can give you a pretty good idea of what is going on in their business-sales are up, down or about the same; services are being delivered on time, or maybe they are experiencing delays; my employees are happy and enjoy their work, or they are dissatisfied and resistant to doing their jobs; or, our customers have a great experience when dealing with our business, or we have a serious issue with customer satisfaction. I mean, seriously, aren't "gut reactions" enough? Shouldn't we be able to make decisions based on our hunches and simple observations? Not at all.
 
Your business is in most cases the most important and valuable asset you own. Leaving its strategy and future to hunches and simple observations is foolhardy at best, fatal at worst. Knowing the actual numbers, the actual objective reality in the best way you can measure it, is priceless. It is the best way to design, plan and direct your business.
 
What should be measured?
Simple answer-everything. The practical answer-all of those critical elements of your vision and goals that matter. Your revenue, and sales and profit projections. Your production and product development projections. Your staffing plans. Your target market and market share growth plans. Your plans for new locations or geographic expansion. And yes, employee and client retention rates, new client acquisition rates, and old client attrition rates. All of the above. The more you know, the more you can anticipate.
 
More specifically, measure all of the things that are critical to the achievement of your vision and goals, as discussion in our recent articles. The most obvious are those things that can easily be measured using the mathematics we all learned in school, like revenues, employee numbers, client numbers, and so on. That brings us to those things that need a different form of measurement. But is it "measurement," or does it require another term?
 
Measuring the unmeasurable
Some things important to your business are more challenging to "measure". Some things are "quantitative", in that they are able to be measured by numbers-with mathematical accuracy. Others are more "qualitative", in that they are more about qualities or attributes. Examples of this are customer satisfaction, or employee loyalty, or measuring trust or respect. Those things may not be "measurable," but they can be quantified.
 
Those "non-measurables" are quantified all the time. Customer satisfaction, employee satisfaction, customer loyalty, product dependability, and so on. Typically, scales are created within surveys, such as the "Net Promoter Ranking," to determine predictable outcomes. Many are quite accurate, and predict the behavior of customers, or employees, or the marketplace, to enable business planning at a much higher level than the usual guesswork or "gut reactions."
 
Establishing your benchmarks
Your written vision for the future of your business holds the keys. There are words, phrases and descriptions of what you want to achieve that are anchors of your vision. Some are quantitative and some are qualitative. Each of these represents benchmarks that are quantifiable at some level to help you understand your progress towards your ultimate goals.
 
Here is a trick: Once you have written your vision for the near future, take a highlighter and mark each word or phrase in your written vision that you would like to measure or understand how you are advancing. Then decide how often you want to measure those items and create a matrix for recording the results over the next year. This can be broken down into quarters, months, weeks or days, depending on the item.
 
Your efforts will pay huge dividends throughout the year and when it is time to look back on 2016.

« Back

Receive Business Owner Insights by email

© 2019 Benchmark Business Group. All rights reserved.