As I have had the opportunity to work with some amazing owners and companies over these last several years, the one challenge that seems to be pretty consistent is really knowing and understanding our numbers. It seems that we talk a lot about our results, or lack of results, but we don’t do a lot of measuring. One statement that really drives home the need for measuring is “If it is not written, It is not real”. (Thanks Pastor Michael for sharing this thought mwchurch.com). We must get away from conversation, emotions and feelings and move into the reality of measuring.
You cannot manage what you do not measure. I know that I have been in a lot of meetings where there was a lot of talk. Traffic is down but not too bad. Sales are a little slower but not off by too much. Margins are struggling a little bit but I think we are still ok. Cycle time is up a bit but we will get better. The new product seems to be selling at a slower pace than we thought but I’m sure it will pick up. Ever been in these conversations? Nothing is real! Conversation cannot be managed. It’s time to slowly start producing the metrics, measurements, reporting that show us how we are really doing. What is our cycle time? What are our margins? How many leads are we really getting? What are our profits? What is our overhead cost?
Here is a list of Takeaways from Chapter 17 in my new book Clarity. It is a general list but it might help spark some thoughts on what you, your department or company need to be measuring.
Possible metrics:
- Sales for the week. Actual vs Budget
- Production for the week. Actual vs Budget
- Cost for the week. Actual vs Budget
- Profit for the week. Actual vs Budget
- Overhead for the week. Actual vs Budget
- Product shipped this week. Actual vs budget
- Product returned this week. Actual vs budget
- Current inventory
- Customer satisfaction
- New product development
Let’s start 2022 developing and understanding our numbers. Let’s spend the time developing the list of metrics we review every week and every month to let us know how things are really going.
If you need some help, order a copy of my new book Clarity.