I am a strong believer in the old adage “If you can’t measure it, you can’t manage it”. As you build your business it is critical that you decide on the set of metrics and frequency of reporting that allow you effectively understand and keep your finger on the pulse of the business. The metrics used should be looked at regularly and shared with appropriate personnel around the company. Keeping employees informed will help them to better understand how the business is measured and how it is performing. This will give them the opportunity to make informed decisions in their own roles and insure those decisions are aligned with the business metrics.
As general manager of the Mobility business unit at Hand Held Products, we developed a monthly score card that was posted for all employees. We held quarterly business reviews with all employees so they understood our corporate objectives and how we were progressing towards them. I have attached a sample of one of score cards below.
As our business grew, we added to the metrics. This gave us a very clear picture of how the business was actually performing compared to our plan. It allowed us to be proactive in taking corrective action by looking at trends and forecasts based on the available data. We captured information and reported analytics for:
- Annual Revenue vs Plan
- Monthly revenue vs Plan
- Year to Date Average Margin
- Monthly Margin vs Plan
- Percent of revenue from Top 10 customers
- Product Sales by product line
- Number of new engineering work requests (EWR) opened
- Number of call center calls
- Total number of repairs processed
- Average Daily Revenue
- Operating Income
- Revenue by Geography vs Plan
We automated systems to capture and report the data. My management team used the scorecard to evaluate and identify potential problems. It allowed us to take corrective action proactively. It kept us from being surprised and allowed us to make timely business decision.
Make sure that you have a set of metrics that provides visibility on how your business is performing. Build confidence in the quality of the data. Review the information regularly. Make the information available to your employees. Make sure they understand why each metric is being evaluated. Periodically adjust the metrics you are using based on how your business is evolving. Analytics are a must and when used correctly they will guide you to make the very best decisions for your company and your employees.