By Garreth Bohanes, Senior Consultant & Business Advisor, eccoConsultants
Think of all the things you do – often unconsciously – while driving. You need to be alert to everything happening around you. Traffic entering adjacent roads. One eye on the speedometer. Someone puts their brake lights on suddenly – you need to react. Before embarking on a long trip, you check fuel, oil, water and tyres. Every six months you’ll need a full service. To be successful (and arrive alive) you need to take a 360-degree view. So why don’t we do this in our businesses?
In business, we often look backwards, but not forwards. It’s quite common for businesses to have only three key performance indicators: sales, cash in the bank and the bottom line. But this is literally akin to driving along and only checking the rear-view mirror.
Sales, cash and your bottom line are lag indicators. They tell you where your business has been, but not where you are going. It’s when you start monitoring other success factors that you’ll really pick up speed. Factors that are essential to sustain growth and profitability, including non-financial areas such as people and culture.
When you’re driving, to safely and effectively get to your destination, you can’t just look back – you need to be looking ahead and sideways, too. You need to check your dashboard for information, like fuel level and temperature. In business, your dashboard should take the form of a scorecard full of aspects that can be measured; key metrics such as lost customers, calls to customers and product returns, amongst others.
Customer satisfaction should be the starting point for your scorecard. Write down a list of product and service attributes, then work out your actions and apply performance criteria to achieve these. If you want to grow your business, how will you get there? How many customers at what average sale will you need? How many calls will your sales people need to make? How much advertising will you need to drive inbound leads?
And while we’d all like to be driving a high-performance Ferrari, we still make sure our vehicle performs at its best. We know that the way we drive and service a car affects performance, such as fuel efficiency and general ‘wear and tear’. Again, we need to be aware of all the factors that influence performance and make any necessary changes to get the best outcome.
The way you operate your business is the difference between driving a lemon or a Ferrari. High-performance businesses understand that achieving success is a multi-faceted exercise and adjust their journey accordingly. But if you’re driving a lemon, chances are you’re not aware what’s going on under the bonnet.
To achieve a high-performance business, you’ll need a monthly business review, awareness of key metrics, a list of milestones and a commitment to look in all directions, amongst other skills.
eccoConsultants utilises a multi-award-winning range of tools, methodology and business improvement programs to assist business owners to uncover and remedy any gaps through strategy development and execution. We can help you take your business to the next level in 2019. Find out more about our high-performance business quiz here: https://bit.ly/2FHAUEm
Written by: Garreth Bohanes, Senior Consultant & Business Advisor, eccoConsultants