How Do You Monitor Your Business Performance?

by Linda Pophal

One of the most important elements of successfully implementing a strategic plan of any size (whether a business plan, an annual company plan, a marketing plan, etc.) is establishing benchmarks or objectives that are specific and quantifiable and that will be tracked throughout the planning period. The use of dashboards is a great way to visually—and simply—convey information on how the organization is doing. Sharing this information openly with employees is also important because, without their support and engagement in the process, results will never be achieved.

Execution of their plans is something that many businesses struggle with; a focus on metrics through the use of dashboards can significantly help to address this problem.

One of my big “aha” moments as a business owner was recognizing the importance of monitoring certain “leading indicators” to help me stay on top of desired results. I very early on realized that, in order to achieve the downstream revenue thresholds that I desired, I would need to develop, monitor and impact certain upstream indicators.

For instance: $ value of new projects taken on each week; $ value of projects completed each week; $ value of proposals in circulation (monthly). These are some of the items that I track on my dashboard, and they give me an indication of whether my annual revenue projections are under/over-performing and areas where I may need to shift my focus.

If I’m over-performing, I can choose to “slack off” for a week or so (if I wish, but I generally don’t). This information obviously becomes very important when planning for a vacation; during the weeks leading up to a planned vacation, I will purposefully work to boost my weekly numbers to cover for the downtime. If I’m under-performing, I can increase my target numbers for proposals, completed work, etc.

Monitoring business performance metrics through dashboards can help businesses of any size ensure that they are on the right track. From my experience, it can also help to ease the ongoing uncertainty about what may lie down the road. If you’re tracking the right indicators, you should know.

Of course, determining what the “right” metrics are can be a challenge and, sometimes, business owners have a tendency to track too many metrics, which can be both costly and time-consuming. You really need to focus on the “big rocks”—the critical few metrics that will help you stay on top of your business performance. A good way to start down this path is to spend some time thinking about what keeps you awake at night. Chances are, the things that you worry about enough that it causes you to lose sleep are the things that are most important to you.

Determine what those things are, and find some means of measuring them on an ongoing basis. You’ll not only sleep better, but you’ll be more likely to achieve the results you’re looking for.

Recommended Reading:

The Everything Guide to Customer Engagement

(A version of this post originally appeared in 2012.)

 

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