5 Top Tips for Measuring Business Success
The process of measuring a business’ performance is something that almost every businessperson underestimates. It sounds easy: simply brainstorm the business performance areas and start reporting them. But in reality, the process is much more difficult. This is particularly the case for small businesses where finding the time to work on the business rather than in the business is always a struggle.
Measuring business performance, which is definitely about working on the business to improve it, is rarely deemed urgent. However, reallocating some of this time to set up a few meaningful Key Performance Indicators (KPIs) will reduce the tyranny of the urgent and help you focus on and improve what matters most.
The KPIs you choose need to be relevant to the objectives of your business and the business processes that must improve to successfully reach those goals. KPIs are most successful when they are simple but not simplistic, and when managers and staff feel a strong sense of ownership over them.
Here are 5 golden rules to ensure that you measure your business performance effectively
1. Don’t measure too much
It sounds like a contradiction, but measuring too much can actually have an adverse effect on your business operations. There are an intimidating number of ways to measure a business, and trying to measure everything will leave you exhausted and will stop you focusing on what’s important. Think of it like setting out to eat a chocolate mountain – tempting, but eating it in one go will make you sick. It’s better to take one bite at a time. Pick just one objective for your business to measure in its initial stages as you begin to develop your KPIs.
2. Only measure what’s important
There are lots of practices that a business can measure, and as illustrated in Point 1, it’s inefficient to measure absolutely everything. So you need to figure out what the priorities are for your business and thus what KPIs you should set to measure the most important activities within your organisation.
3. Be specific about your business goals
Business goals are too often too vague. How can you measure something without it being clearly defined? To avoid this, use very specific language to describe evidence of your business goal being achieved. It is this evidence that becomes the basis of what you measure.
4. Don’t get hung up on availability of data
A lot of companies claim that they cannot measure something that they have no data for. Don’t let numbers and statistics limit your consideration of the potential measures that will give you the best lead information for your business.
5. Don’t design business measures for somebody else.
Don’t design measures for a staff member or team without their involvement. The measures will fail unless you involve those people in the process. Work with the people concerned and they will have higher ownership of the measures produced and more buy-in to using them – this will improve the performance of the processes in which they work and will consequently have a positive effect on business results.
Developing the skill of measuring business success is something that takes time to hone. Treat your first implementation of performance measurement as practice, not perfection. By allowing yourself to learn from your implementation of performance measurements, you will develop some great measures that give you insightful and actionable lead information.
We can help you to improve your business by designing and implementing a performance management system fit for purpose. Get in touch today to find out how Ascend Twentyone can help improve your bottom line.