What ever happened to good old business metrics... like making money?

I read an article aimed at business start up's recently, which talked more about measuring the success of a business by tracking it's web traffic than it did about monitoring revenue, cash and profit... It got me thinking about what is important for all businesses to measure. 

These days, there is no denying that driving web traffic, optimising your search engine ranking and generating a loyal online following are critical to business, but I don't know many shareholders or investors that would be willing to invest in this alone. Therefore it comes down to balance and to finding the right things to measure for your business and focussing on them relentlessly in order to drive forward.

While every business is different I believe that there are a few things that every business should monitor;

Customer

Unless you have a monopoly in your market, you have competitors... Your customers know this and they're quite happy to listen to the benefits of trading with your competition rather than with you. So, listen carefully to your customers and find ways of measuring their satisfaction levels and dealing with their requests for change. Engaging with customers can transform your business... they have feedback for you on everything from how you greet them, to how easy or difficult your products are to use. So, understanding what works for your customers is key. If you can adapt your service and products to the demands of the market, you're more likely to keep the competition at bay. Apart from talking to your customers about this, you may also want to measure their satisfaction... 

I've seen many methods of measuring customer satisfaction/ engagement over the years, 'Net Promoter' Scoring being one of the more common. Net Promoter is a simple measure of how likely your customers would be to recommend you to a colleague or friend. It is based on the premise that only customers that are happy and satisfied would be willing to actively recommend your service and there is evidence that businesses with high NP scores will also enjoy business expansion. Where organisations with low or negative NP Scores will contract. You can read more about Net Promoter here; http://en.wikipedia.org/wiki/Net_Promoter 

People

Your people are your business... they represent you every day and are the face of your organisation. There is an undeniable link between how happy and effective your people are and the experience your customers receive too. Creating an environment where your employees enjoy their job and feel like you are investing in them as individuals will always mean that you get the best from your team. 

If you're a bigger business you may choose to survey your workforce and measure their levels of engagement, if you're smaller you may just want to speak to every employee face to face about what can be done to improve the different aspects of their relationship with you and your company.

Things to consider, include; working environment, relationships with co-workers and line manager, communication, reward and recognition (not just financial). There are other elements too, and it's likely that you'll have things that are unique to your company. Whatever these are, make sure you spend time to understand how your people feel about them and act on their feedback.

Operations 

There are things in every business which need to run effectively in order for you to function. Commonly, it's things like; manufacturing of product or key service levels being met. These are hygiene factors and customers tend to take it for granted that these will be delivered on time, in budget and in agreed service levels.

Make sure you map your key processes and eliminate as many key person dependencies as you can. Is there a critical path of activity you should understand and have contingencies for?  Have plan b's for key deliverables, because your customers won’t forgive you too often for letting them down. 

And finally... The Numbers

Call me old fashioned, but I think this is a pretty important measure for business. Anyone who has managed a business, big or small, will tell you that keeping a close eye on the numbers is critical. Your revenues and profits are in essence the ultimate outcome of everything you do. They reflect; the quality of your product, how your customers value your service, how successful your marketing is, how well you are managing your capital and spend... everything! 

So, let me explode a myth... watching the numbers isn't  just about the revenue and profit. It will help you to monitor the health and wellbeing of your business, in the short and long term. I once heard it said that "Money isn't everything... but it ranks right up there with oxygen!".

When it comes to your business, money is just that, oxygen! It's also the output of your efforts... it won't appear without the diligence and focus on the inputs we've talked about in the areas of people, customer and operations. So 'measure' the inputs and 'enjoy' the outputs.

By all means, make sure your web listings are optimised, watch the YouTube and Facebook friends soar as you promote them to the world... but don't forget the good old, time honoured measures of business success; Engaged and happy people, enthusiastic and satisfied customer and efficient operations. Get these right and chances are, the numbers will follow.

The secrets of great execution

For those of you who have worked in larger businesses, I'd be willing to bet a few days wages on the fact that you've seen your fair share of slideware, designed to articulate the next big strategy or plan for your business... am I right?

I'd also take a substantial wager on the fact that you could look through the archives of your business and find years worth of plans and concepts sold to the business by well meaning executives, that never made it into practice within your organisation... right again? That's because writing a good strategy is the easy part for most businesses (in relative terms at least). I'm sure that you already intuitively know what you 'should' be doing, and if you don't, then your employees most likely do! 

So getting those things down on paper as a plan or strategy shouldn't be too difficult, should it? I say that with my tongue firmly in my cheek of course... Because the first part of great execution is obviously, having a plan worth executing. The planning process and the brave decisions that are often required to build the right plan, are not easy and require robust investigation into the options that exist and a cool head to choose the correct path. However, creating a strategy is not the subject I'd like to talk about in this post. 

One of the things that has fascinated me over the years is why some people succeed in delivering their plans and why others fail, regardless of the quality of the strategy itself. In the final assessment of any plan, it all comes down to the results and benefits it has delivered. And one thing is for sure, if the plan never makes it out of powerpoint, there won't be any results or benefits to measure at all!

So, in my view, the secret to successful delivery of strategies is 'execution'... the careful management and systematic delivery of your plan. Here's my take on the 5 key elements that enable those that succeed in execution, to do so;

1) The People

If you're really serious about delivering against a plan or strategy, you'll do everything and anything required to ensure that you have all of the right people on the execution team before you start. And 'Team' is the key word in the previous sentence... keep your team as small as you can, because fewer people makes it easier to align the team and give the clarity and support needed to all involved. 

In order to ensure efficient execution, there's no room for passengers on your team either... be ruthless in the selection of the people you surround yourself with. In order to ensure effective delivery of your plan, they need to be the very best you can find.

2) Mindset and Culture

Execution is a mindset as much as it is a paper planning exercise or a series of tasks that need to be delivered and monitored. It's about building a culture of; constant action, taking reasonable risks, going the extra mile and building momentum. If you've chosen your team carefully, they most likely think and act in this way already... your role as leader, is to ensure that you create an environment where this attitude is nurtured and celebrated and where progress is king. 

Beyond your immediate execution team, it's also critical that the people in your organisation understand; the burning platform or desperate need for the change you want to see, they need to buy into the plan itself and have an apatite for supporting the people involved to meet their progress milestones. 

3)   The Execution Plan vs. The Business Plan

Let's be really clear... The business plan or strategy you create, is not the execution plan. They are two very different things. Just because your business plan tells you that there is a market opportunity for you to deliver a new product by July, that won't make it happen. 

The execution plan needs to be build separately and needs to be simple enough for people to understand and sophisticated enough to outline the critical path and components that need to be delivered and by when. 

Every moving part should be owned by the best person for that particular area... think carefully about how to carve up the execution/ delivery of the plan too. For example; is it more appropriate to do it by functional area (Marketing, Sales, Operations) or is it by task (produce product, create marketing plan etc) - This will be different from project to project, but it's a critical part of delivery. Factors to consider when carving up your plan, are; the key deliverables on the critical path, the people on the team and their skills, timescales, the amount of contingency you need. 

4) Manage the delivery

I'm don't believe in over engineering processes, but I do believe in what gets measured gets delivered. If, after creating your execution plan you are clear on the steps that need to be taken and when, then it's perfectly reasonable to ask for measurable progress against that plan in the time-frames everyone has signed up to. Be sure to set up regular forums for you to measure progress... Daily, weekly, monthly meetings are all appropriate, depending on the length of the project and if possible all of this should be project managed by one dedicated person. This provides a forum for ensuring that all of the necessary links are in place and also gives the project lead the opportunity to push and challenge. 

The time scales and complexity of the project will inevitably influence the degree of program management you need in order to succeed in your execution. My preferred style of delivery (Where it is practical) is small steps or sprints towards the key milestones... if you believe your execution plan and key milestones are correct and you understand your critical path, then you should focus on the near term deliverables where appropriate to deliver constant progress which will ultimately lead you to your destination.

5) Measure the right things

Be sure to measure two things in managing an execution team... the first is the delivery against the plan - by this I mean the specific action items and the timelines - These need to be met in order to stay on track with the plan. The second is the results and benefits that those actions deliver, but you should only start to measure these when appropriate, otherwise they will distract you from the delivery of the item itself. 

The temptation with most plans is to look for tangible benefits and results almost as soon as you start to execute. Be very clear at the outset, WHEN you expect to see results and to what level and measure them aside from the delivery of the action items on the plan. Also, specify the key indicators of success and only measure these elements. 

As a final note, it's important to acknowledge that you will learn along the way. For example, 3 months into a 6 month project, you will know things that you couldn't possibly have known at the outset - fact! Be humble enough to acknowledge that you may need to adapt your plan as you begin to deliver it. You may want to set up some formal review points at the outset and prepare to be agile.

This isn't necessarily a scientific approach to execution it's simply my view of what has worked for me over the years. I hope you can take some of it and apply it to your business. I'd love to hear about any alternative methods too!

The Google business philosophy

When it comes to building a successful business, brand and following, few know how to do this any better than the internet behemoth that is, Google. 

Google registered their first domain name, Google.com, on September 15th, 1997... By June 2011, comScore estimated usage of this, once-in-a-generation business's search engine to be at c.1 Billion unique users every single month!

How do they do it? Well, the key to their success is the ruthless pursuit of their business philosophy. You can see exactly what that is, right here - http://www.google.com/about/company/philosophy/

The secret to improving your productivity

      Treat every day like the day before you go no holiday!

        Think back to the last time you went on holiday... Specifically, the last 24 or 48 hours before you left the office for your vacation. I know that for me, that 48 hour period is usually very, very busy and surprisingly productive. I seem to get more done in that 48 hour period than I do in an average week.

      Most people getting ready to fly off to spend two weeks in the sun spend a focussed period of time making sure that their ‘to do’ list is cleared and all major tasks and potential issues are dealt with before they leave.

      As a consequence, this period can be significantly more productive than the average day. So why not have a day a week that you manage your time in this same way, or better still, treat every day like the day before you go on holiday… imagine how much more you could achieve!?

Some of the best advice I ever received...

   Over the years I've been fortunate enough to be around some incredibly inspiring and insanely creative people. I've taken every available opportunity to observe the things that set these people apart from those around them - I’ve captured their advice and I’ve watched them deliver results through their actions.


   I’ve filled note book after note book with snippets of advice, experience and their wise counsel… I thought I’d start my blog by sharing with you 3 pieces of advice that have had a big impact on me and my philosophy of doing business. They aren't necessarily the most important or significant, they've just struck a cord with me and helped along the way... It also doesn't make any of them right or wrong. I'll let you judge whether they might work for you. So here goes;

1.    Find the half a dozen things (That make the biggest difference)

   Everyone’s heard of the 80/ 20 rule, right? 20% of the things you do, will deliver 80% of the results you get. This is profoundly important when it comes to succeeding in business as well as every other aspect of life!

   Why is this important? Well, there are a few (Usually about half a dozen) things in any role or job, that will deliver the biggest and most impressive results for you and for your organisation.

   The trick to being really successful in any given role is to identify early, what those things are… Let me explain - In any undertaking, there are usually about 5 or 6 things that, if done well, will produce amazing results for you, your team and your business. Part of your accountability in any position of responsibility is to uncover these 5 or 6 things, understand how to do them brilliantly well and then to be really disciplined to ensure that you spend most of your time focused on them.

   There will be many distractions which creep onto your table, but you need to remain focused and resolute on your top 5 or 6 priorities. Be cautious too, because the 5 or 6 things won’t always stay the same – your priorities this year may be different to next year for example.

   Find your 20%, be better than anyone else at it, discipline yourself to spend most of your time doing it… and don’t forget to review it every now and then to see if they need to change!

2.    The compound effect

   Legend has it, that Einstein observed compound interest to be the 8th wonder of the world - Interest given to a sum of money then compounds on the initial capital to also earn interest itself and so on.

   Given enough time the results that this process can deliver are quite astonishing. The same is true of the small actions you take towards your goals. There may be occasions where one huge action will deliver the end result. But more often it will be hundreds if not thousands of much smaller actions taken over time, that deliver their compounded benefit to you and your business.

   Don’t underestimate the impact that every seed you sow is having on your businesses future. Sometimes your actions today feel insignificant, other times you may feel burdened by the smaller tasks and the more mundane aspects of the job. But every effort you make today is a seed planted for tomorrow.

   Every report you submit, every meeting you lead, every project you manage will all form the basis of your future. You will learn from them, people will notice your effort; you will re-use the material you create and these actions will compound on themselves... Plan you’re activity carefully as it all leads you to your destination, wherever that may be.

3.    Be a student, not a follower

   In an interview a few years ago I was asked the question. “Who would you most like to be like, in the organisation?”…  It’s a great question and there is usually a person, past or present, you could pinpoint to say “I like the way Joe does things; I’d say I’d like to be just like Joe”.

   As you go through your career, you will undoubtedly come across people that make a really positive impression on you. But remember everyone has their faults and there is no ‘right’ way of doing things.

  Your actions should be the product of your own decisions and rather than you simply trying to imitate everything one person does. You should try to absorb only the things people do in a way that you consider to be valuable.

   Part of being a good student, rather than a follower is recognising peoples limitations and faults! Build a composite view of the people you encounter, take something from each of them until you have constructed your own ability to be a collection of the very best skills on offer.


  So, what about you?... what advice or nuggets have made a difference to your business philosophy?