Is your business strategy working?
How do tell if your business strategy is working? Measurement is the key. It is the evidence required to know if your business is going in the right direction, headed towards accomplishing your targets.
According to a study by BDC, most successful companies use this measuring progress. The fastest growing businesses were almost 50% more likely use these metrics to measure their performance.
Milestones and performance measures
Develop an action plan to assist your business strategy, and ensure that it includes the metrics you intend to measure. These metrics can be quantifiable performance measures, such as profit and revenue, or business milestones, such as the completion of a major project. The milestone you select will be unique to your business. Other milestones include tasks such as hiring key staff, launching a new product, or obtaining a business loan.
You have several options when it comes to selecting performance measures. It may be difficult to select the right one to follow, so ensure that you are deciding wisely, as these metrics will be your company’s focus of energy. Here is how you can select and use performance measures:
Link to strategic goals. The metrics you use may be financial in nature, such as revenue, profit and cashflow. Or you may choose to measure metrics that are in relation to operational efficiency, sales or marketing goals or environmental impact. Whichever metric you select should be clearly linked to the strategic goals of your business, with the aim of directing your team members towards the actions you require.
Goals need not be complicated. Try to avoid overloading your team members with performance measures to track. We suggest no more than four metrics per team. It is also crucial that your team knows how to track the metrics. Without correct training, the data will not be measured correctly, and this can cause your strategic goals to fail.
Keep the data updated. Ensure that you always measure data that is up-to-date, and report it to your company promptly. This is vital to making metrics a source of feedback on your company’s performance.
For more advice on business strategy, read the Perils of Poor Business Strategy by 9East Marketing Services.