Measure it to manage it

You’re either in control, or out of control. It is of the utmost importance to know the difference, and the only way to know that is to measure what you need to control.

Take profits, for example; certainly you measure the amount of profit, and as a percentage of sales, but is that percentage consistent with prior periods? Do you measure profit by product, by team member, and by customer?

Many business owners are satisfied to simply know they have made a profit, and don't bother to make further measurements.
What do you measure? That question reminds me of some advice my dentist gave me: "Only floss the teeth you want to keep." Measure only the stuff you want to manage. Be sure your team knows what they should be measuring and managing, and how they personally will be measured and managed.

What are the most important metrics you manage in your business?

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1 comment:

  1. "What I learned from Rockefeller that's off-the-hook important is: You need to know exactly where you stand in a business at all times. Measure everything, because everything that is measured and watched improves."

    - Bob Parson
    GoDaddy, Founder

    Click here to read more.