No. What is really important for your business

   In Petra coach, I have worked with companies around the world to determine what I call "the most important priority for focus." 

I find that most companies fall into one of two categories when it comes to measuring the success or failure of this priority: o measure everything and lose focus on key indicators, or I measure something - and I mean nothing. Once I entered a $ 10 million company does not have the financial statements; company paying the bills are literally based on the bank balance. 

Companies that measure things that usually have a good handle on where they have been. While this is a necessary practice for any business, the problem with this approach is that it is equivalent to just look in the rearview mirror while driving your car! They use a lagging indicator to tell how they have been done for a certain period. True, the production of these figures are part of running a good business - the business school will tell you so - but that's not the whole story. 

RELATED: Read more columns by Andy Bailey 

While it's better than no metrics at all, keeps lagging indicators are limited to see the past, when you really have to look forward to the indicator. These forward indicators provide every day or even every hour, information on their progress toward desired outcomes. 

Here are five ideas to help define and manage 'their business critical numbers: 

1 Select only a few "numbers mirror." 

Select two lagging indicator of a list of numbers. Ask yourself: "If I were stuck on an island and could only get two numbers, two allows me to understand the health of the company?" 

Once you pick them up, find a way to collect the right data so that you can update as often and as clearly as possible. For example, in my previous business, one of us is a lagging indicator of gross profit, and got to see the real-time indicator. 

2 Understanding the leading indicators and adapt quickly. 

The main indicator is the "act or activity" which, if done regularly, will bring you to the results you want. Determine the number of indicators (best three) that will make the most positive impact on your business and then watching them on a regular basis. Create space in your schedule to do this activity and ensure all companies do the same thing. 

3 Specify a leading indicator of compensation. 

Be careful to not focus on one area of your business. I have seen companies that only focus on increasing revenue, and in doing so, inadvertently destroying customer service. They make money, at least in the short term, but it gives a very poor customer experience in the process. Compensation set of leading indicators that contribute to the overall health of your business, not just a bank account. 

4 Educate everyone on your team. 

Once you understand these principles, it is your responsibility to teach everyone in your organization, and more specifically, to teach how each individual ingredient may affect them. People need to know how a company makes money and how they fit into the equation. If the team members are educated on simple numbers, they will begin to master them. 

5. made ​​public. Get this information for all to see. 

Think of it as your net business. You can use an online dashboard AlignToday.com or simple whiteboard. It is important that the visual data and right in front for all to see.

Tweet