Make Your Metrics Crystal Clear
12th October 2020
We all know that when it comes to business, one of the key things we need to have a handle on are our numbers.
However, there’s no point having numbers for numbers sake! You need to understand what the numbers your tracking actually mean and how best to use them for the overall health and growth of your business.
There’s no point having numbers that are as clear as mud!
Let me introduce you to Helen, who runs an online retail business. Helen knows that when it comes to running a successful business it’s important to measure what she’s doing. So, right from the get-go, she’s tracked her finances, marketing, operations and people metrics.
As Helen’s business has grown she’s hired more people which, of course, means more numbers to track.
Every month a sophisticated set of management reports is created that she and her management team talk through. But, regardless of how detailed the report, somehow Helen still feels none the wiser about what the numbers mean and how her business is really performing overall.
The numbers being gathered all say different things and, although the report goes out to all her staff, they don’t seem to be all that excited by them.
The benefits of a numerate outsider
Helen visited our website and came across a John Harvey-Jones quote we’d shared that says, ‘Every business should sit down once a quarter with a numerate outsider’. Feeling like this was a sign, Helen picked up the phone and, after talking together to understand her business and what she needed, she invited us in to be her virtual FD for the business. She wanted us to help her and her team make sense of all their numbers.
We sat down with Helen and her management team to go through the numbers. We went through all the metrics they were gathering, challenging them on the assumptions behind them. Then based on their aims for the business, we worked with them to develop a set of KPIs which we established from the few key numbers that were tied to their business plan.
By narrowing down their vast quantity of numbers to just these few key ones, we were able to help Helen and her team see the wood from the trees.
Together we created a one-page plan (which Helen’s team called their dashboard) that gave them a clear and concise picture of the overall shape of the business and which areas to focus on for future growth.
The other metrics we helped Helen’s team put in place were drivers that showed each of the individual departments how they contributed to the KPIs. With this very specific information Helen’s staff were finally able to see what was expected of them. This helped everyone to get on board and feel excited about how their work was positively impacting the growth of the business.
Every business needs metrics but every measurement you take needs to have a meaning and a purpose and those who contribute to them need to understand how they can influence the metrics and why it matters.
If you’d like help producing a clear one-page plan for your business. our team is here to help. Give us a call and arrange a meeting to discuss your needs.