Stephen Covey said, “Begin with the end in mind.” Before you consider an investment – whether it’s infrastructure or marketing, or the building of people capacity in your business – you need to know what you want. You need to determine how you will measure success. How else will you evaluate whether the investment is worthwhile, or just throwing money?
Sometimes the challenge is that the anticipated return is not monetary. Sometimes it isn’t even tangible. But often you can convert even the intangible into observable, measurable indicators that help you assess the wisdom of the investment up front – and analyze the back end success of the venture.
Here are some measurement ideas:
- Employee-initiated Turnover
- # of Employee Complaints, Grievances
- % Participation in Improvement Teams
Effective, Efficient Processes
- % On-time Delivery
- Cycle Times
- % Rework
- $ Warranty Work
- % Repeat Sales
- # Inbound Referrals
- % Market Share (Increasing)
Good Team Leadership
- See above
- See below
- Bench Strength (each leader has a backup)
- Production Backlog
Good Sales Machine
- % Revenue Increase
- % Gross Margin (Stable or Increasing)
- # of Customers
- $ Average Sale (Steady or Increasing)
Sound Strategy and Execution
- See Above
- Achievement of Goals
- % Net Profit
- $ Retained Earnings
This list doesn’t cover everything. The point is that it’s important to measure.
There are intangibles that can cause your business to thrive or take a dive. But you can only manage what you can measure. If your biggest issues in your business right now relate to the intangibles, it might help to ask yourself one or more of these questions:
- What results do I want, and why?
- What are the current obstacles that I need to overcome? How do I know?
- How will I know it (whatever “it” is) is improving?
- What can I count? Is it # of incidences, time expended, # of days to resolution, # of people involved, etc.?
- What is the interim result that I need to improve if I want to improve the overall result?
It is sometimes easy to become drawn into the day to day crises and production needs of your business. But as the leader it is important to keep your eye on the middle distance and on the horizon. When you know clearly what success looks like, and measure your company’s progress along the way, you can maintain your focus in the place it’s of highest value to the business. Moreover, you can make better decisions about how you can best allocate your resources toward the future of your choice.