As owner of the company you should have a handful of “smart numbers” that give you insight into how your company is doing, and more importantly what it’s likely to do in the future.
Commonly referred to as KPI’s, or Key Performance Indicators. They are numbers that are objectively calculated (not opinion based) and can be tracked over time to spot trends. They are likely to be associated to key objectives or goals of the company so that progress towards those goals can be measured.
Some are looking at what is happening now, or in the very recent past, and some are focused on the future. The ability to predict is a key leadership function. To have a “smart” number measure or ratio that gives you some insight into future performance of the firm is absolute gold. Would you agree?
It’s best if you also have one or two “critical numbers” around which to align the company. A critical number represents a key weakness in the company, that if corrected, will fix a lot of other problems.
Every person or team should have some kind of weekly metric that aligns with the critical numbers.
Post the critical numbers and the regular updates where all staff can see them. It will act as a reminder that what they are doing on a daily basis should be influenced by wanting to advance the critical number to the next level. Talk about these numbers at weekly meetings and what can be done to improve them. Don’t cover every KPI every week. Just pick one per week, but the 1 or 2 CRITICAL NUMBERS should be a separate topic each week.
To download a copy of a KPI formulation and monitoring template, CLICK HERE.
For help to develop a KPI list specifically for your business, send me an email and we can make a time for a chat. Email me at andy@tradescoach.co.nz