No matter how well your company may be doing, there is always room for improvement. In order to boost your business' performance, you need a way to measure that performance - and any changes to that performance - over time.
So how do you track business performance? Here are a few simple, but necessary, steps required to measure your company's performance and set the stage for improvement.
- Set concrete goals. What are you trying to accomplish? What is the end result that you want to achieve? What areas of your business do you want to improve? Before you can take any action to improve your business, you must first answer these questions by establishing specific (and realistic) goals.
- Identify the information you need to track in order to reach those goals. When selecting your business goals, you need to focus on things that can be controlled and changed. That often means finding the cause of the effect you want to produce. For example, your goal may be to increase profits. You can't just will yourself to have better profits; rather, profits can only improve if you either cut costs or increase sales (or both.) While you can't directly control sales, you can control the number of salespeople you employ or the number of sales calls they make. By digging down to the root causes behind the goals you're aiming for, you can determine exactly which business metrics you need to track.
- Find ways to measure these metrics. You may have to develop a reporting system to record and analyze the data you need to track your progress. For instance, if you are tracking the number of sales calls your company makes, you will need some way to keep a tally of how many sales calls are made.
- Research, research, research. Research isn't limited to competitive business intelligence. In some cases, it may be worthwhile to conduct your own research. For example, let's say you want to track and improve the quality of your customer service. You could try to analyze the number of repeat sales or calculate the ratio of customer referrals to the number of complaints - or you could simply ask the customers themselves. You can do such research through surveys or focus groups, or even by setting up basic A/B tests to see which options or methods work best.
- Find and improve upon your weaknesses. After tracking the data for a while, you can identify which areas of your company would most benefit from improvement. Benchmarking your performance compared to your closest rivals is one way to determine where you are excelling - and where you are falling short.
- Develop a plan for improvement. When you know what your weaknesses are and where you would like your metrics to be, you can come up with a plan for improving how things are done at your company.
- Recognize and reward improvements in performance. Provide incentives for your employees that reward them for measurable improvements in the metrics you've identified. In many cases, simple recognition of a job well done or the satisfaction that comes from accomplishing a goal can be motivation enough.