April 12, 2012

What Key Items Are You Tracking?

By : John Barbar

When coaching our boys at various levels and in different sports, when the score wasn’t kept officially, (the kids always kept score), the intensity and focus on the game was not as high. The quality of the game was raised when the score was kept. There’s a saying - "Performance that's measured, improves. Performance that’s measured and reported on, improves exponentially.” This is a true and powerful statement. Keeping score changes the way we approach the game. Wouldn’t this same principle apply in business? Measuring and reporting on key activities for the team to be aware of will raise the bar. Why then is it so difficult to put into practice? The challenge is twofold: discipline and knowing what to measure. Companies that get this concept and actually do it, reap the benefits of improved efficiencies, increased profits, team accountability, course adjustments, and enhanced corporate value. So where to start? The discipline needed begins with a decision. So, decide today to start the process. Next, it's important to identify the right items to track...you may be asking, shouldn’t I track everything? Start measuring items that provide the greatest return to the business. Here are a few questions to answer. 1) Sales: What is the key activity when done today will generate future sales? For example: phone calls, appointments, presentations. 2) Operations: What component of the process is critical to the success of efficiently producing the product? Is labor a critical piece of the costs? Do you monitor overtime? Do you have waste, if so, what is the key measurement to reduce this item? Caution: it is important to monitor both efficiency and quality. 3) Marketing: What marketing strategy is being done today with an anticipated return tomorrow? Is there an expected return on investment on the various marketing efforts? 4) Finance: What are the day’s sales outstanding? What is the working capital balance? What is the estimated profitability on each job? So now you made a decision, identified the activities to measure, now take action! Decide. Determine. Deliver. The results will speak for themselves! Live Passionately! John 561.302.6304 Click here to sign up for the weekly article from Barbar Financial This is the Barbar Financial Minute: A weekly business strategy brief for entrepreneurs and business owners. For more information visit: www.barbarfinancial.com | email: john@barbarfinancial.com | or call John Barbar: 561.302.6304.