The #1 Secret to Staying on Top of Your Business

If someone were to ask you, “What’s the number one thing you’d recommend doing to manage or stay on top of a business?” what would you say?

It’s not an easy question, is it?  There are lots of possible answers. For example, you could say, “Hire great people in the first place.” Or, “Manage people by wandering around.” Or, “Hold a daily meeting.” Or, “Get a daily cash report.” Or, “Be a One Minute Manager®”. Or have your people write a one page summary at the end of each day of what they accomplished.”

But if you were to ask me that question, I’d probably respond, “Use a dashboard that you monitor daily.”

Now, while you may not use the word, “Dashboard,” frequently, you’re already surrounded by them. For example, when you log on to your investment account, you’re probably looking at a simple dashboard. You can see data on that page that’s distributed in tables and graphs in order to show you—in a snapshot—what they believe should matter to you.

In the case of your investment account, chances are you can see—in a quick glance—how much you have in your accounts in total, how many shares you have of each investment kind or group, how your investments have faired over a certain time period (usually in terms of percentages) and you may even have a graph or two of how your money is divided into different sectors or investment types. That’s a dashboard.

Well, the same thing should be true of your business. You need a snapshot, a visual representation of data, that you can look at quickly and almost instantly have a sense of how well your business is doing. But in order to do that you have to determine, “What’s the most important data I need to see on a daily/weekly basis that can help me manage my business?”

While every business is different, here are a few key metrics (some people refer to them as KPIs—Key Performance Indicators) that small and/or medium-sized businesses might want to track. For example

  • # of new leads
  • # of referrals
  • # of sales conversations
  • # of new clients
  • # of first-time repeat customers
  • # of members (or subscribers)
  • Daily Cash Balance
  • YTD Revenues (or Expenses or Profit)
  • Expenses (by Department)
  • Margin Percentage
  • Accounts Receivable
  • Revenue Mix

Now, the key thing about dashboards is that they have to be contextual. In other words, there is no one right dashboard, only the one that works right for you and your needs. You have to select which metrics matter to you. Which metrics will help you quickly assess how your organization is doing. And which metrics will help you make mid-course changes in order to assure that you’ll hit your targets for the year.

The reason this matters so much is because of that old management maxim, “What gets measured, gets done (or one of its variants like, “We get not what we want, but what we inspect.”). Invariably, if you’re watching certain metrics every day (or week), those numbers will matter to you. On the other hand, if you never measure them or only measure them sporadically (like maybe monthly), chances are they won’t drive any actions.

So, my recommendation to you is that you figure out the five to ten most important metrics for your business (Note: as the leader, you don’t want to be monitoring more than ten every day). Then, once you pick out those 5-10 metrics, you (or someone on your team) can simply create a spreadsheet to start monitoring them (a Google Docs spreadsheet is a very simple way to start). And then it’s just about entering the key data.

If you’re doing this yourself, you may want to start with a weekly dashboard. But if you have staff, have them update data that should be monitored daily (like your daily cash balance). Make it easy by using something like a spreadsheet in Google Docs. Then, as you get used to it, you can gravitate to a more sophisticated software solution with cool graphs and the ability to import data automatically. But, that said, don’t let software get in the way.

As I said, you can create a dashboard in Google Docs in minutes. At the top of your page list your goals for the quarter in one box and next to it, your goals for the year. That way, every day (or every week) you open your dashboard, you’re focused on your key goals for the quarter or year. Then create a column head for dates in column A under your goals, followed by column heads for your key metrics (like, “# of new leads”) in the columns next to the date head. That’s it and you have the start of your first dashboard.

But, and this is why a dashboard is so critical to management, once you start monitoring your metrics on a daily/weekly basis, you should start seeing changes in behavior. For example, if you’re a professional services firm, chances are your revenue is dependent upon the number of referrals you receive. If you’re looking at the referrals column and inserting the number zero day after day (or week after week), you’ll be motivated to get more referrals (i.e. no one likes inputting zeros). Furthermore, by watching the referrals number today, you’ll  head off a revenue problem long before you’d normally notice it.

So, do you have a dashboard? If you do, is it driving behavior? If not, how can you change that? And if you don’t have a dashboard, what’s keeping you from setting one up today?

If you don’t have a dashboard yet, then (before today is done) decide what key metrics you should be monitoring on a daily/weekly basis. Create a spreadsheet (or use an online tool). Start inputting the data. And then monitor that data on a daily/weekly basis. You’ll be glad you did (and trust me, you’ll feel like you’re in more control of your destiny than you did before).

To your accelerated success!

P.S. If you have some other key metrics (KPIs) that you like to use in your dashboard, share them in the comments section below (or click here if you’re reading this through your RSS feed or email).

P.P.S. Each department or area of your business (or organization) can have their own dashboard as well. For example, Marketing could have a dashboard, Customer Service could have a dashboard, Fulfillment could have a dashboard, Finance could have a dashboard, Legal could have a dashboard, etc. But, as the leader or owner of your business, you need to have a high level dashboard of the most important metrics that need to be monitored that, if monitored, will assure business success.

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