Want to improve your business performance? It’s not just all about the numbers…
When it comes to checking on the progress and performance of your business, it helps to have an eye for the numbers. Even more so if you know how to use those numbers to improve the way you work. Here’s a quick run through of what it all means…
Financial reports are great for telling you how your business performed last month and that information can often be extremely useful in helping you begin to work out how to improve your strategies or business processes. However, this information is known as lag information and only really tells you how your company performed in the previous month without giving away too many clues on how you can implement change.
Other kinds of data used in business forecasting are non-financial and this is gathered from your business processes. This will provide the lead information needed to inform you on how to improve your business. Although financial statistics help to verify the achievement of financial goals, they do not help to improve business processes because they don’t tell you where they are weakest or why.
Businesses need to start with a good strategy before measuring and improving their processes. Without a good strategy in place, your business will end up either measuring too much, measuring the wrong things, or you’ll waste your time and money changing business processes in ways that have little (or no) impact on achieving business success.
Starting with clear objectives makes it easier to focus on the right lead information. You can find this by deciding which business processes have the greatest impact on a particular goal. For example, your business might focus on decreasing expenditure as a goal – but don’t be tempted to give every business process a goal of reducing expenditure.
Why? Because there is such a thing as ‘good’ expenditure and some areas of your business may need to increase the money spent in these areas, such as business development, planning or marketing. The only kind of expenditure that needs to be decreased is that which is wasteful, unnecessary or isn’t strengthening the business. The right lead information is critical in helping you pinpoint the areas of your business where you need to focus on decreasing unnecessary expenditure.
Having said that, you’ll also want to identify which processes can be streamlined without negatively affecting their purpose and contribution to your other business goals. This will provide meaningful ways to reduce expenditure in your business.
A simple performance measurement process is a useful process in any business. Here’s how you can put one in place:
- Choose a goal you really need to achieve
- Make your objective measurable by being clear about its performance result
- Choose the best one or two potential measures that provide evidence of your result
- Define how to calculate the values of your measure. Be practical and realistic about the data you can obtain to create them
- Measure your objective over an appropriate and consistent period of time, such as a month or year – this will help track patterns in performance
- Make a decision about the action required to achieve your goal when any opportunities or challenges are identified and take action
At Ascend Twentyone we can help you make sense of all those numbers and data… and help you implement a good strategy, identify clear objectives and implement a hard-working performance management process that can increase your bottom line. So get in touch now to find out more.