Efficiency

Managing by the Numbers

I know I go on about why numbers are important, in a previous article I talked about why the numbers are important in sales and marketing, and at some point I will cover the accounting requirements

Not Today though, today we will talk about operations., the delivery of what you do, the numbers that tell you how efficient you are, the numbers that tell you how to become more profitable.

You need to know how much it is costing you to deliver a product or service, how much you are making on average from each sale and how often a customer is buying from you, you should want a quantifiable way to measure customer service, a measurable way to rank yourselves against your competition, on metrics that your customers actually care about.

I hear so many different business owners and senior leaders tell me that they give better service, sell more effectively, and are liked more by their customers than their competition and yet when I ask them to quantify it, they can’t, at least not in any meaningful numerical way.

Just saying something does not make it true, it is true thought that if you simply ask customers to their face if they like you, they will of course they say yes as they don’t want to offend you, after all we are British and we don’t complain until we have already taken our business elsewhere.

You need to know the hours your people work on each task in the delivery of a product, service or project and when those hours tip into making a loss on, you need to understand which process or part of the process you can cut down, improve or reduce and the better you understand these things the more profitable you can be.

I’ve said it before and it worth saying again, a business is a machine, its complex and made up of people and culture which adds a lot of layers of emotional complexity to any changes that may need to be taken, but despite what you may want to believe or others might want to tell you the numbers do not lie, you can manipulate them, you may be selective in which ones you look at but they do not lie.

If you want your business to be more efficient, to produce more for less effort, (which is usually a good thing for you, your customers and your employees) then you need to measure and look at the numbers, you can use them to uncover the bottlenecks slowing down delivery, the issues that really annoy your customers, and the feedback that drives value.

If you want more profit then start to measure all of your performance and not just the bank balance

If you want to know more get in touch.