I like the challenge of a good bike ride but not one that’s full of surprises and no end in sight. So if you’re like me, and in business, here are some thoughts on making the journey manageable.
All businesses need to monitor, measure and manage what they are doing. Frankly the order of these isn’t that important as it’s a circular process anyway. The three actions feed onto each other naturally enough, with the goal to optimise performance:
- Monitor what you are doing, be it through daily, weekly or monthly reporting
- Measure the outcome so you know how results fare relative to expectations
- Manage the performance so you improve the efficiency and effectiveness (costs and results).
Here is a practical example of what I shared with a distributor using both bricks and mortar retail stores and also selling online:
- split sales by channel
- sales this month compared to last month (month on month sales)
- sales for YTD this year vs last year (year on year sales)
- actual vs budgeted sales.
A few other things:
- monitor these results at least weekly
- the results should ideally be broken down by product
- and measured by unit sales, turnover, and margin
- ideally you would want to be able to analyse sales by region or area to find the hot and cold spots in your sales
- and know your top customers results for these metrics.
If you monitor and measure these results you’ll have a lot of valuable information. You’ll have a very good feel for how your business is going before the end of the month’s results. You’ll have plenty of quality information to feed back into the team, and most importantly the information to manage the business rather than the other way around.
It’s not everyone’s cup of tea to monitor and measure so give responsibility to someone in your team that has the diligence and interest in it that it deserves. Ensure though that you don’t abdicate accountability for managing, as this is where another set of skills are likely to be required.
There’s no end to the cycle of monitoring, measuring and managing, but it can be a pleasant ride if you get involved. If not it’ll be like going downhill, blindfolded, over rocky terrain with no suspension.
Go 2 Market principle: get these reports created so that you can monitor and measure your sales, then manage them to success.