Why track performance? Not tracking performance would be the same as if you watched a football game and never knew the score – what fun would that be? And why watch at all? Scorecards and metrics are your tool for understanding progress towards your business goals and they provide you with vital information as to how you can improve your business. How can your business survive without them?
Businesses many times spend countless hours putting together and distributing reports. But, do they drive business results or just contribute to killing more trees and filling up your email inboxes? I’ve found that businesses waste countless hours and valuable resources publishing information that provides no value. It’s no wonder metrics and scorecards aren’t considered important in many companies.
However, if you have a solid metrics process, you can drive significant business results. For example, I’ve seen companies utilize metrics to double their inventory turns (freeing up substantial cash), reduce their costs significantly, etc. In my experience, I’ve found there to be three keys to implementing a successful metrics process.
First, review your current metrics and reports to identify which ones provide real value in running the business. If you aren’t even sure what the report means, toss it out. And, if you have none to start with, think about what the key drivers are for your business. For example, if you are a distributor, inventory and customer service are probably important. Start with those and put together a simple report that tracks the progress of your top goals.
Second, just start. It’s not important for your metrics to be fancy – charts and graphs might look good but it is far more important to publish metrics that are meaningful to your business, simple to understand and ones that will provide the key facts for identifying opportunities and decision-making. The back of a napkin is fine if it contains the important facts for your business.
Third, DO something. Pay attention to the data – after all, you spent time to make sure it was the data that meant something to your business. If the trend is going in the wrong direction, take action. Or, if the data points to a success, think about how to build upon your success. Metrics are useless if the data isn’t utilized to improve the business.
Forget your excuses about not enough time, too much to do – understand your goals, identify the key metrics and BEGIN. Results will follow.