The better the knowledge and information that you have at your finger tips, the better decisions you make and therefore the better actions you take. This can be an ever increasing circle, one which we have seen repeatedly across the world of sports.
Football in the 70’s only looked to be judged on the final score and how many drunken nights out the players had. To put it into context the record transfer fee didn’t hit a million pounds until towards the end of the 70’s and the highest weekly wage being less than £36,000. The financials in football went up dramatically with the formation of the Premier league in the 90’s, but along with that came sports science leading to the measuring and recording of many statistics and attributes of the players and the game. This has lead up to today where we are talking about £200M transfer fees and players earning, what some judge to be, astronomical amounts of money. One of the driving factors behind this is understanding the numbers and measuring performance.
The same theories have been transferred to every other sport, two obvious examples are Formula 1 where they measure everything to the N’th degree and how much money is washing around in that sport. The second example, one with a lesser degree of financial reward is the highly successful British cycling team from the 2012 Olympic games. Sir Dave Brailsford and his management team understood the performance of the bike and the athletes so that they were able to find tiny improvements across a combination of areas leading to the milliseconds of improved performance. These tiny fractions lead ultimately to medal success on a highly celebrated level, and in many cases leading to knighthoods and other honours.
You are now probably thinking, what has this got to do with my business?….
To put it simply – your business has many different areas of performance, are you measuring them? If so how? And what are you doing with that information?
This can feel like a minefield and I know many business owners who have left the corporate world to have more freedom of choice who don’t want KPI’s (Key Performance Indicators). That is fine, I am not talking about KPI’s, I am talking about understanding how your business works to enable you to make better decisions and gain better results.
Let me give you a simple example – when was the last time you did a time study and measured where your time goes on a weekly basis? I have done this on numerous occasions with business owners and you would be astonished by how much time we have saved by actually looking at where the person was losing 5 or 10 minutes here and there. Let’s just say that we saved 5 minutes per day, every day on a 5 day working week, which then transferred to a 50 week year (allowing for 2 weeks off). That gives a saving of 1250 minutes or almost 21 hours, that is an extra 3 working days on average. What would you do if you had an extra 3 days? or even how much more profit you could generate with those extra hours?
The business dashboard should be your go to place to track how your business is performing, at the moment. For most, tracking performance means looking at your daily bank balance, I don’t think this is enough, and certainly doesn’t help you to improve your business.
Think about all the areas that if you track them, review them and improve them can add value to:
- The value of service you deliver to your clients.
- The performance of your marketing investment.
- How you sleep at night because you have control of your cashflow.
- The performance of your team.
- The time you spend against the time you waste.
- Your profit v your turnover
These are just some of the areas you can look at and every business owner will want to focus on different areas.
The positive mental effect of knowing how each area of your business is performing becomes a platform to improvement, growth and a better work-life balance.
Think about a garden, if you tend it and look after it the grass looks good and beautiful flowers grow which you are proud to show off and have a relaxed, contented feeling about. When you ignore it and leave it to nature, you still get some flowers but they are not as beautiful and consistent as you would like them. What you also get are weeds that start to take over and grass that is patchy at best. Which garden do you want to compare your business to?