Your business results don’t reflect the effort you put in. Sound familiar?
If so, you are not alone. Indeed, some of my clients have been working so hard that they are nearing burnout. This is often because they are focusing on the wrong thing, which they believe to be the right thing. This is why having a forensic view of your company – x-ray vision – helps you to focus on those factors which make the biggest difference to your success. Working smart, not working hard is the difference which makes the difference. Productivity, not activity.
For example, if you are spending a lot of time bringing in new business but haemorrhaging customers out the back door, your efforts will be as effective as attempting to fix a burst pipe with a sticking plaster.
Or perhaps you are spending your time bringing in new business that you don’t have the infrastructure to support? Like building a house without it’s foundations.
Maybe your customer service is poor and you are busy sending out feedback forms when really the problem is that your hiring processes and training do not enforce your company value of customer satisfaction?
Or is your business booming but your customer’s aren’t paying their invoices? This is where success leads to ruin.
So, x-ray vision on the essentials helps you work strategically - making the right decisions about how you spend your time and your money and what will be the best strategy to take your business forward. The first step is to get yourself some key performance indicators. These help you to measure your performance against target on areas you consider to be important, for example:
- Product revenues
- Sales growth
- Cost of sales
- Performance against budget
- Sales conversion ratio
- New sales by marketing method
- ROI (see individual blog about this)
- Revenue by customer
- Employee satisfaction
- Employee performance
- Revenue by employee
- Customer satisfaction
- Customer complaints
- Customer complaints resolved
- There are also various KPIs for:
- Social media
- Site engine optimisation
- Call centre performance
Lies and statistics
A lot of clients view a nice big turnover as proof of their success and they just work very hard at increasing that number. However, a forensic examination of the statistics will let them know whether there is also a healthy profit because if the ratio of profit to turnover is low, you are working hard for little reward. It will help you look at what is creating the biggest profit and whether you need to make a loss on something to bring in profit on something else. This is both an art and a science. Also, if you are producing lots of nice big invoices but not getting paid because your credit control is not effective, that turnover is meaningless.
Here are my 5 steps to help you take control of your business with x-ray vision:
- Consider what KPIs you want in your business (the above are just a few examples)
- Regularly review performance against these
- Look at the relationship between them
- Decide what is causing the positive results and do more of those
- Determine what is causing negative results and take remedial action. Make sure there will not be negative consequences elsewhere.
Remember that an x-ray shows you what is wrong structurally, it is up to you to find out the cause and to take appropriate action.
If you need help with any of this – it is hard doing it for yourself – do give me a call on 0845 130 0854. I look forward to hearing from you!
© Tricia Woolfrey 2013
About Tricia Woolfrey - click HERE to find out about the author.