There is an old saying, “You cannot manage what you cannot measure.” I think a better phrase is, “You cannot manage what you do not measure.” In some way, you can measure most every activity in a business today. I will add a phrase, “You cannot get to where you are going if you do not know where you are.”
We have more technology and more tools to measure things than ever before. Yet, somehow I am seeing less measurement than ever before. We have CRMs, but we don’t input the data. Sometime we input some of the data, but do nothing with the data. We have systems to measure phone traffic, but often don’t and, if we do, we don’t do anything about the traffic or how we handle it. We spend more money every year on tools to measure our Internet traffic, but yet don’t always know our numbers or do anything with those numbers.
At the moment, the marketplace is fantastic. Sales are high and most people feel good. How quickly we forget. We forget the lessons of when the marketplace was terrible and how hard you had to monitor every detail. Keep in mind, “Big doors swing on small hinges,” and, “If you cannot be trusted to do the small things, you cannot be expected to do the big things.”
The marketplace is very forgiving right now and that makes up for a lot of errors. It won’t always be that way — and your competitors won’t, either. Somewhere, right now, there is a smart and aggressive leader at one of your competitors who not only knows the numbers of his business, but he also knows most of the numbers of your business. He is using those numbers to attack you like a nuclear bomb. Soon, he will dominate you and make your life such a living hell that it will be hard for you to recover. Am I being dramatic? I don’t think so.
The days of being a “good” entrepreneur and running your business from the seat of your pants are over. In addition to being a strong entrepreneur, today you must also be a solid businessperson. A solid businessperson knows their numbers cold. He plans and strategizes using all the measurables available to him.
I am shocked when a dealer does not know what his or her numbers are. Watch the TV show Shark Tank. Watch what happens when contestants come on the show asking for money and don’t know their numbers. Imagine that you are taking your business on Shark Tank, asking for money. Could you stand the heat? Would you know your numbers? Would you know what your plan is and what your strategy is to get there?
Another analogy would come from sports. Can you imagine a basketball coach who did not know his or her numbers? “Hey Johnny, you seem like a good shooter, so I want you taking more shots.” Good basketball coaches not only know each player’s shooting percentage, they know where on the floor they shoot the best and when. They know if a player shoots better from 10 feet out than 15, or from the right or from the left. The coach knows if the player tends to shoot well in the beginning of the game or still shoots well down the stretch. Everything is measured.
There are only a few reasons why you do not measure items in your business. You may not have processes in place. You may not have good leaders and managers holding people accountable. You may simply not have the right people who will get things done. Your people — including yourself — may not want to be held accountable. You and your people may be lazy. None of these reasons are acceptable and are all excuses if you do not fix them.
A business that is run without measuring is not a business but a practice. A business is scalable and can be grown with efficiency. A practice has a lid on its growth and a leak in its bucket. It’s just a matter of time before the leak has drained the bucket. Are you willing to take responsibility for your leaks and fix them?
For a free Special Report “Knowing Your Numbers,” email me at info@tewart.com.