The majority of people who read this article title will probably think that it is a ludicrous suggestion and they are indeed correct – you shouldn’t drive blindfolded. Yet many of the business owners and even managers that we come across in the work that we do, are metaphorically steering their businesses blindfolded. They operate without a visible dashboard to warn them when their business needs help or if they are not operating effectively. They have no GPS warning them to adapt their course if they wish to reach their desired destination. This is a very dangerous mistake to make.
Some business owners are averse to administration and therefore neglect to invest the time to start tracking their key success factors. They may even argue that because they are so hands on and directly involved in the business, they do not need any additional information.
Collecting data and analyzing it, does not need to become an extremely time consuming effort. In fact, we argue that at all times the benefit from the investment of your time and energy, needs to outweigh the investment made.
Business owners who are directly involved in operations often need performance data more than they think. They can easily get so involved in the day to day operations that they lose sight of strategically managing their business. In these instances they often only become aware of problems once it has escalated to crisis levels.
So what do you need to do?
1) Once a year, take the time out for strategic planning. Create a month by month plan with very specific focus areas and goals to work towards during the next year.
2) Based on the above, choose a small number (3-5) of critical success factors that you are going to monitor closely. These are the items that you should at least review on a monthly basis. There may be other measurements that you choose to check more regularly or even less frequently than monthly. Choose your measurements very carefully so that you do not end up unintentionally driving the wrong behaviour. A business, for example, which targets to reduce employee turnover may in fact discourage managers to address unacceptable employee performance, because it could increase employee turnover.
3) Decide what exactly you intend to measure – a number, a percentage, a comparison to the previous month etc.
4) Identify the source of the information. Is it information that is already available? Will someone need to manually record the information?
5) Decide who needs to see the measured information. For whom will it be of benefit? Keep in mind that this can enable people to “auto-correct” their performance, when they notice that they are steering off course. In addition, it could be a good way to recognize progress, hard work and effort.
6) Assign the responsibility. Who will have the responsibility to communicate the progress made on key success factors every month? Make sure that assigned team members are 100% clear on what is expected of them.
This process will really only be of value to you if you utilize the information for decision making purposes. Utilize it to take corrective actions swiftly or to capitalize on improvement initiatives. It can ultimately become the differentiating factor that keeps your business on track during its journey to ever increasing success in these uncertain economic times.
To learn more about Su-Mari Du Bruyn visit her page.