“If you can’t measure it, you can’t manage it”, said Peter Drucker. For that, if you want to have your effort considered and to understand, after all, how much it is converted in outcomes the energy spent on every day of work, it is important to think about measuring the company’s results.
Whether you haven’t considered it deeply yet, or you want to check some important key points regarding this subject, we highly suggest that you read this article written specially for you.
The importance in measuring the company’s outcomes
The company’s income is not the only concern at the end of the month anymore. Even if it is still very important, other indicators also share the attention from modern managers, such as mean tickets, conversion rates, loyalty, volume of complaints, profitability per product or service, and many others.
Although this measurement varies from market to market, one thing is a fact: the need for knowing better your business and the landmarks it reaches is higher and higher.
Besides reaching several goals, the measurement also serves as a fundamental tool for proper decision takings, and also to provide an innovative environment.
Today, it is estimated that two thirds of the actions from managers have a corrective profile, and only one third is preventive; the tendency is that we must anticipate what comes next more and more often.
Using the history of stored information, we should be capable of tracing good projections of future backgrounds. And then, once more, we will be able to see the great necessity for having a good measurement composition inside the business.
How to create good indicators to measure the results
There is no exact science on how to manage companies, even while dealing with technical and assertive topics. Even so, some good market practices must be taken into consideration in this case.
The first advice is to evaluate which types of indicators are specifically used at your market. Search for a while and write down those ones that present higher relevance. Probably, you will see that they show up more frequently.
After that, look inside your company. The organizational culture of your business can give you hints on which indicators are more relevant and adherent internally. Write them down, too.
When you have an interesting options list in hands, you can start assessing which ones are more significant. At this point, you can separate measurement ways not only for your business as a whole, but also for dedicated areas, or projects.
In the end, elect those which will be your tools for internal measurement. Remember to choose the more objective, pertinent, and easy-to-identify ones.
If they take too long to be calculated, maybe they’re not that useful – since they have consumed a long time. In these cases, consider hiring a company that offers appropriate technology to automatize these indexes for you.
Boosting the productivity
As they say at economy, “we have limited resources”. To understand that you just need to think about all tools, and production means you have at your disposal at work: your team, the company’s power for investment, time, suppliers, and even the volume of potential clients.
This condition makes the survival of the business be determined by the volume and type of return it can reach, by using the weapons available.
If you measure what every department, project, technology, or work policy can provide in return, you can also make decisions that will reduce losses and will boost the incomes. It all depends on loyal indicators at a good measurement, and the alliance between the IT and Sales departments. However, do not forget that a high quantity of indicators leads to an unnecessary micromanagement, so it is interesting to build a “pareto” indicating which are the 20% more important indicators that can show 80% of the company’s reality.
Reducing expenses
Considering the fact that the return over the investment made in every business passes tangentially to the matter of the difference between income and costs, identifying unnecessary expenses helps directly in the majority of the business results.
This task (reducing expenses) becomes much more evident during crisis periods, or more aggressive markets. The point is: how to identify the proper expenses to be cut?
If you have a good way to measure the outcomes from each aspect of your company, you will find this answer easily. Projects or initiatives that do not survive financially must be eliminated immediately, unless they are responsible for indirect outcomes.
Let’s take a simple example where a service does not offer relevant profitability, but it is the lure for the clients to hire other options that will bring good results together.
So, it is time to prioritize cuts, while remembering to check and well understand your indicators. Do not make the mistake of using shallow analyses.
Keeping income and schedule under control
By adopting a good practice while using measurement indicators it is not only useful for evaluating the final outcomes, but also to unfold all the process. It means that there are very concrete chances to transform it into appropriate decisions throughout the route.
In projects, for example, it is always essential to trace a good parallel between the scope already drawn, and the one projected initially. This reference is worth for both the evolution of the service, and the evaluation of the pace of costs and investments.
The importance at this point is not to leave anything to be discovered when things go out of control, at the end of the project.
Still talking about management of income and schedule, take advantage of the possibility of comparing the planning of new projects with others already developed. Certainly, the lessons learned with previous opportunities will be pretty valuable while elaborating new projections, or even managing your IT budget.
Don’t forget to exchange impressions with other departments, because this knowledge will bring benefits to the group, while it will be maturing your company.
So, did you like our post today? If you already use business outcome measurement at your company, have some questions about this topic, or know other tips that you want to share with us, feel free to share them in the comments!
