Peter Drucker gave us the famous phrase, “What gets measured gets done”. And isn’t it true?
Never mind in business, it works in life.
Want to lose weight? Weigh yourself regularly and (ouch) share the news from the scales with your ‘accountability’ partner.
Want kids to help around the house? Give them a star chart and a reward and watch them go.
In business we get a bit stuck with what to measure though.
We measure stuff that our accounting software tells us to measure, or our accountant tells us to measure, or because we measured it in the company we used to work in, or because the guy in our business networking group measures it.
But rarely do we measure stuff because we, the guys who are running the business, making decisions, affecting change and managing staff think we should be measuring it.
A good example of this is marketing measures.
I get to sit in on lots of management team meetings where revenue goals, strategy and tactics are discussed and I’ll let you into a secret. Lots of businesses talk about marketing measures but can’t answer these questions:
- What’s our current conversion rate?
- What’s our client retention rate?
- How much work comes from referrals?
- What’s our average client lifetime value?
It’s not that the teams don’t want to use these measures; it’s just that no one thinks to pull the information together regularly and consistently. Finance don’t do it because it’s not a ‘finance thing’ and no one else takes ownership because marketing is so often a hat that’s passed around the management team rather than worn by an individual.
The trouble for these business, of course, is that if they’re not measuring conversion rates and the like, they’re not working to improve them, and if they’re not working to improve them, well they’re not making revenue generation any easier.
But that wouldn’t be you. Would it?
Julia Bickerstaff’s expertise is in helping businesses grow profitably. She runs two businesses: Butterfly Coaching, a small advisory firm with a unique approach to assisting SMEs with profitable growth; and The Business Bakery, which helps kitchen table tycoons build their best businesses. Julia is the author of “How to Bake a Business” and was previously a partner at Deloitte. She is a chartered accountant and has a degree in economics from The London School of Economics (London University).