Though he’s referring to baseball, Jim Evans’ stance on tracking metrics can be applied to professional organizations just as they are to professional baseball organizations.
Metric tracking is a fundamental process for companies that practice the Great Game of Business. And although it’s an essential part of playing The Game, it isn’t uncommon for companies to find themselves at a loss for whether or not they’re tracking the right numbers (what we would call a Critical Number™). Sometimes company leaders don’t even know where to start tracking!
If you’re just starting to implement the principles of The Game (such as transparency, communication, and business literacy education), you might be wondering how to start tracking business metrics.
Coming up with a Critical Number™ can be difficult, but in reality, it’s simply this: start with a pool of numbers that seem as though they could be important to your overall success, then rule them out one by one until the pool is small enough to count on one hand. Those are your critical numbers.
Here are some tips and provoking questions to help you generate a pool of possible “right numbers”:
Now that you have a BUNCH of numbers, it’s time to play the elimination game, as here is my final piece of advice for determining the metrics you’re going to track:
Once you’ve narrowed down your critical metrics, you need to ask yourself one morequestion: are you comfortable that you’re monitoring the right numbers?
You don’t have to say yes right away. Sometimes you’re not going to know your essential and critical numbers right away, and other times you’re spot on.
Either way, though, you’ll need to implement a system to organize your numbers.
For this, I recommend starting a dashboard.
Most companies do not have an all-in-one dashboard that will automatically upload and present information from various sources. For most of us, it will be a manual operation — i.e., grab some numbers from your accounting software, take some from your customer database and so on.
Your dashboard will be your accountability tool. It’s going to help keep your entire workforce on track so it should be clear, easy to read and very accessible. Essentially, it is a “board,” not unlike the dashboard of a car, or the dashboard of your Google Analytics account that contains all the important metrics, past, present and future (goals).
Based on the metrics you are tracking, assign dashboard metrics as needed to ensure that each function is contributing to the higher-level goals (future numbers).
Having a dashboard is great, but in order to get the most out of it, I have a few tips:
If you haven’t been monitoring the right numbers in the past, this approach is almost certain to improve results in a relatively short time.
If you still aren’t convinced that you’re monitoring the right critical numbers now, the weekly huddle results will tell you so — especially if your critical numbers seem to always hit their targets, yet, your profitability does not improve. This is a great indication that you’re not yet focusing on the right ones.
To circle us back to sports statistics and analytics, Lou Holtz, former football coach and ESPN analyst has said before, “In the successful organization, no detail is too small to escape close attention.”
Once again, it applies to sporting games, and it applies for the Great Game.
About the Author:
Bill Collier is the St. Louis area coach for The Great Game of Business. He helps businesses increase accountability and results with open-book management. He is the author of How to Succeed as a Small Business Owner…and Still Have a Life.
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