You can’t manage what you don’t measure!
Since starting out in business as a teenager, I’ve been interested in metrics. Like most business owners, the first thing I measured was my bank account. Then I measured the number of hours a week I worked, the number of clients I had and how many hours a week were chargeable.
Over time, things got more sophisticated. As well as bank balance, I measured the liquidity ratio on my balance sheet. As well as new customers, I looked at leads, conversion rates and times. As my infrastructure grew, I acquired more pieces of equipment that could affect my business if they went wrong.
Ok, it might seem like I was a tad obsessed! However, there’s an adage that ‘you can’t manage what you don’t measure’. While most businesspeople do understand why they should establish key performance indicators (KPIs) to measure and review their performance, many important KPIs are not being measured because of the cost, or because they’re buried inside complex reports or ‘dashboards’.
Also, this process can easily get out of hand because each KPI consumes resources to measure and review. Some, like whether your website is up, must be checked every few minutes, while staff holiday leave entitlements and debt level might need checking only monthly.
Therefore, trying to track all the KPIs and worrying about the unknowns keeps many businesspeople up at night. They can’t leave the office because either they need to keep checking things or they’re afraid of what will happen if they are away. They never really feel in control.
This is exactly what happened to us at Direct Marketing Software after the 2011 Queensland floods. Internet, power, computer systems, our sales pipeline, our productivity – everything was falling apart. And we had our hands full on the disaster recovery job and assisting our clients that had been affected. We dropped many balls because there weren’t enough hours in the day to keep track of the things we regularly measured and checked.
This dire situation led us to completely rethink business monitoring, creating a Cloud-based system that solves all the above problems. The result was Bizeo, which:
- allowed us to set up as many KPIs as necessary
- extracted KPI data automatically from our existing computer systems, equipment and data sources on the web
- prompted our staff to enter manually calculated KPIs when necessary.
- monitored KPIs automatically and notified us if any went outside acceptable parameters.
Now I can measure anything I like and but I also have the freedom I needed. The Bizeo indicator comes with me on my mobile phone, tablet or computer (even to the beach!). If I want to see a KPI’s current value, trend or even detailed report, that’s available to me too. But, mostly, I just want to see that green dot, which tells me all is well.
In 2013, the key to business success will be KPIs. But it doesn’t need to be complex, costly or resource-sucking anymore. So get to it and best of luck!