Let’s talk about the numbers…
Managing and reviewing data can often be an overlooked aspect of running a business, but it is vital for assessing performance and effective decision making. It can often seem tedious to trawl through spreadsheets and daunting if you are not mathematically inclined. However, as a leader, having the correct numbers to inform and justify your actions is an asset you cannot afford to disregard.
Find the right numbers
Although I advocate continual use of data, this does not mean I recommend using, or even harvesting, all of it. Modern companies can become swamped by their numbers, with so many ways to measure and store them. The increasing influence of technology is on the one hand, a fantastic tool for tracking performance, but on the other, a definite reason for excess information and confusion.
To begin you must understand what pieces of data are most important for your business, whether this is turnover, profit percentage, retention rate, etc. Once you have considered this, you can separate your numbers into two groups:
1. Functional data – everything you can possibly measure, useful or not
2. Insightful data – information that will most support your decisions
Defining these groups may take a little time, but this practice of extrapolation will pay-off long-term, as your actions become more consistent. Establish dashboards across your organisation, so the right people have the right numbers at their disposal, to ensure the right outcomes.
Your essential tools
Without numerical evidence, gauging the extent of success is near impossible. By measuring past and present performance, data is an important tool in shaping the future. It is true, that many numbers will require some context to communicate their meaning more clearly, but for the large part, they tell a truth we need to hear, whether we like it or not.
As a leader, having data to support your decisions will result in far greater confidence in achieving your goals. If you can demonstrate to your colleagues and employees that these actions produced these figures, it is very difficult for anyone to either misunderstand or object. Think of reviewing your data, not as an inconvenient chore, but as a chance to showcase what you and your business has attained.
Three principles to embed
To best utilise your company numbers, I suggest employing these three fundamental principles:
Alignment – Make sure your stakeholder reward systems are intrinsically linked to performance metrics. This will mean that greater engagement is stimulated across your organisation, where diligence is recognised and respected. As well as highlighting excellence, this will also discourage negligence, where hiding from the numbers is no longer possible.
Transparency – Educate people across your business if they do not possess the required numerical acumen. By broadening this knowledge holistically across your company, you are ensuring that everyone has sufficient understanding to plan and react optimally and do not feel excluded from the important details. This will mean you are heading in a unified direction.
Vulnerability – Your business can become vulnerable to inefficiency if bottlenecks occur. One of the most common examples of this, is over-reliance on the financial department. If too few people, possess the skills to use the data effectively, then they will have to deal with an unnecessary workload which will slow your systems and processes.
It’s down to you…
I encourage my clients to get comfortable with their data, so they have the clarity to develop their businesses productively. During my time as a coach, I have observed and replicated specific strategies for the best ways to extrapolate the necessary numbers, whilst building a comprehensive picture. This means my clients can go away from our coaching sessions and implement more insightful practices, assured by the correct information to support and measure their performance.
Don’t be scared of your numbers, make sure they work for you.
If any of the themes covered in this article resonate with you, please book a free discovery call with me here…