First of all, happy new year! From the entire team at Business Benchmark Group, we hope 2019 brings you ever greater success and prosperity.
So as we kick off the new year, I'd like to continue with the message I began last week about how vital it is to know and understand all the key numbers in your business if you want to make strategic fact-based decisions rather than making decisions based on guesses and emotions.
So, how do you know which numbers are most critical to the success of your business? It always comes back to a common theme: what is the alignment with what you are doing and with what you are trying to build?
What are you aiming for in the next 90 days? The next six and twelve months?
Having everybody focus on the critical numbers and where they fit into this ensures that what gets measured gets done.
Everybody in the business must be aligned with the critical numbers. You can’t have five departments working on different numbers.
When you’re focusing on the numbers, it’s vital to know that what gets measured is the right thing. What gets measured, dissected and communicated must be consistent throughout the organisation, from top to bottom.
You can’t have the marketing department working on a customer retention plan, while the front-line people are trying to attract new clients, while the managers are trying to cut costs.
Sound crazy? Believe me, it happens. Does this sound like a path to productivity?
In business, every dollar you spend is either getting new customers or keeping your current ones. Does everybody in your business know what you are trying to do? It’s up to you as a leader in your business to ensure this alignment from top to bottom.
It’s fair to say that good activities lead to good results. Bad activities lead to bad results. But it actually has nothing to do with the activities. It’s all about the decision that was confirmed and embraced at an earlier time.
That’s why it takes great management to create great results. Fewer activities but higher productivity lead to better results. Less is more.
If something is not going okay you need to give it a chance. Not everything works out perfectly first time around. That doesn’t necessarily mean you are on the wrong track. But, if it’s not working after three, four or five times, you have to make a brutal truth decision and make a change. Sorting out problems is a path to productivity. Sticking with something that is not working is a path to trouble.
It takes great management to create great results. Great managers pull something up if it’s not working. They know it’s not working because they have the critical numbers and they are constantly asking the question about what needs to change.
What’s working and how can we build on that? And what’s not working and how can we fix it? If you don’t know the numbers, how can you do this? As Jeff Bezos, founder of Amazon and currently the richest person in the world says, "If you don't understand the details of your business, you are going to fail".
Good management ultimately gets measured when things are not going so well. It takes very good management to take the emotion out of: we’re on track here but it’s needing some strategic refinement – our numbers say we need to brainstorm this and come up with three or four options to take it to a new level.
It’s risky. It’s not for the faint-hearted. It’s for the assertive and the decisive.
But we all have the same opportunity to reach this level. If you think you’ve made the first decisions and that’s it, that’s not going to work.
So going forward in 2019, make a commitment to better understand all the numbers in your business, consider which are the most important and how they align with your strategy, and constantly review and evaluate them. Share the key numbers with your team and get everyone on the same page, working towards the same outcomes.
Power to you in 2019!
Stefan Kazakis on 5 May 2018
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