Are You Breaking Records or Nearing Disaster in Business

If your business was nearing disaster, would you even know before it's too late?  How would you be allerted to serious problems?  Would you rely on an employee to tell you?  Do you think your competitors are such good friends that they will give you a head's up?  Or, would you need to sort through piles of reports to find problems?  You need a systematic approach for identifying potential problems before they become total nightmares.

On the flip side of that, you also need a way to measure success and break records.  Although it feels good, and it certainly sounds good (at least to you), you can't just go with your gut.  Again - reports:  who has time and if you make time, will you really know what you're looking for?  Will all of the pieces make enough sense that you can do something valuable with it?

I can come up with hundreds of more questions just like the ones above, but the answer is somewhere else all together.  For those of you who were reading my blogs back in 2009, you will remember one called, "Record Breaking Business Tracking Systems".  http://chelmsmba.blogspot.com/2009/02/record-breaking-business-tracking.html  THIS IS THE ANSWER.

These are charts of graphs, often referred to as dashboards, that give you up-to-date reporting that will save your butt and make you a business hero.   With these dashboards, you will track everything that you would otherwise need a long report to figure out.  Someone will report the data and enter it into a simple Excel spreadsheet and the graphing add-in program will create your charts.

Here's the really important reason to use tracking systems.  When you see a drop in production and it lasts 3 weeks, you don't need to wait until 3 months to recognize it and solve the problem.  By then, it could be too late.  If you track new customers and you see that total new customers drops by 3 per week for the last 3 weeks, you give yourself a chance to turn it around before it gets totally out of control.

On the other hand, when something is working really well and you see the graph jump to a new high range, you get an opportunity to figure out how it happened and reinforce what works.

THESE TRACKING SYSTEMS ARE ABSOLUTELY CRITICAL TO BUSINESS SUCCESS!

You may be saying to yourself, "I get it, but I don't need graphs, besides it's just Excel.  Big deal."  You better believe it's a big deal.  It's the single biggest deal I know of to positively affect business growth.  Go back and re-read by previous blog about business tracking systems, then put some serious thought into the following question.

By how much do I want to beat my competition?

Promotions happen from growing the business and beating the competition.
Raises come from growing the business and beating the competition.
Recognition for being a great manager comes from growing the business and beating the compeition.

If you want help setting up your Record Breaking Business Tracking System, then I want to help you.  Contact me and we will work something out that makes sense for you.  I've written the manual on how to create these systems (literally).

Metric Decision Making

One thing that I've come to understand about management is that it is far too easy to get caught up in emotions and "gut feelings" and when decision making comes from those things, it's very easy to get it wrong. Take firing someone as an example. I'm a top manager and as such, I've had more than my fair share of people who have taken shots at me. I've been insulted and undermined. I've dealt with passive aggressive individuals who were smiling to my face and stabbing me in the back. I've even worked with plenty of people who I just didn't really like very much. I can't just fire everyone that I don't like or who doesn't like me. Sure, if I give a directive to someone who understands and agrees to my face, but sabatoges me or my business when I'm gone, I'm absolutely going to send that guy packing. We need our team members to act like team mates and not like enemies. I think that's pretty well understood.

It's the emotional things that I really want to focus on though. If you don't particularly like someone, you might just have to get over it. Number 1: we dont make decisions based on likes and dislikes - period. Number 2: what if you get rid of a top-performer based on something personal and/or petty? What if you don't even realize that person is a top-performer? What if you don't even know what would define a top-performer? That's a serious problem.

You need metrics to help guide your decisions. You need to know how your employees perform compared to other employees in your company and to other people in other companies within your industry. This starts by knowing how your company performs compared to other companies. Do you know how much revenue each of your employees should generate in a work day. Do you even know how much they are generating at the present time? If not, that's a problem. You need to figure this out.

What about ratios too? Do you know how many people it takes to run your operation? Well, how many customers does each of your employees help per hour? 1? 2? 10? How many dollars does each of your employees generate? How many dollars per hour? Now, what if you don't particularly like someone because your personalities seem to always clash or because that person doesn't seem to want to do things "your way"? What if that person generates $1,000 per hour compared to your average employee who's doing it "your way" and generating $750 per hour? If that's the case, I think it's just about time for you to suck it up buddy.

Your not going to make decisions based on emotions and gut feelings when you can do a little work and find out some really solid metrics to help guide you. Without those metrics, you're going to lose someone who outperforms the rest of your team by 25% when you should be looking at the guy who produces $350 per hour instead.

This way of thinking will save your butt over and over again. It will help you decide which customers to dedicate most of your time to and which customers to stop spending time with at all. It will show you which products are selling the best, even if you don't particularly like them (which won't matter with metrics). As I've clearly shown you here, it will help you make smart hiring and firing decisions so that you don't lose valuable people and poor-performers. If you use your own numbers and compare them as many ways as you reasonably can, you'll be around a lot longer to keep making those smart decisions.

Metric Decision Making > Emotions & Gut Feelings.

Decision Making is Not a Popularity Contest

"When I've heard all I need to make a decision, I don't take a vote. I make a decision."
- Ronald Reagan

As a manager, when a decision you make doesn't work out quite the way you planned, who's going to be held responsible for it? You are. If you only make decisions based on others' approval, do you think those other people are going to be around if the decision turns out badly? Of course not. So, why should your decisions be a popularity contest? So often, I've seen managers who don't want to make decisions without the approval of others around them. This is because they aren't confident in their decision-making ability, they fall to the pressure of other strong-minded individuals, and/or they just don't want to take risks that are part of big decisions. Management exists because someone has to take the lead in business. So lead. Don't let your decision making be part of a popularity contest. Here's how it's done.

1. Identify the problem or the area of opportunity that a decision must be made on.

2. Talk to those who are involved in this specific area. The purpose of these discussions are to gather all of the available information from the perspective of staff - not to gain approval.

3. Review any other available data that could be helpful in making your decision.

4. Measure the potential financial impact of the decision - positive or negative.

5. Decide and put the plan into action.

The point is simple: all you need to make your decisions is relevant information. Once you have all of the available relevant information, you then must decide, act, and don't look back. All of your decisions will not be popular with everyone that you work with and they don't need to be. They just need to be good decisions based on relevant data. Don't get lost in popularity contests and don't get bogged down in the fear of big decisions. To be certain, important decisions bring with them various levels of risk. That's part of the deal, but you are in a position to lead by making these decisions. So, don't leave them up to the consensus of others who won't be around if the deal goes bad.

I want to note that I'm not suggesting that managers should ignore the good advice of others around them. Good advice is part of the information-gathering process. I'm just saying that it's up to you how you use it. Never ignore good information.

Finally - when you make smart decisions based on relevant data and the deal goes as planned, who do you think should get credit? This is a 2-way street. A leader who is able to make tough decisions, based on all of the available, relevant data, deserves all the credit - especially considering that you'll take all the blame if it goes bad. And, if you allow your decisions to be part of some group consensus, expect to be lonely when the group was wrong. Be strong and lead with good decisions.