If it isn’t measured ~ it doesn’t matter

Some people have a natural ability to make money. I don’t.

Some people can keep track of every important business number in their head and tell you what the next month will look like. I can’t.

  When I became president of Raven Machine & Tool a contract job shop, my primary role was sales. I needed to be out of the office three and four days every week drumming up business. Yet I had to stay well informed about what was happening in the business as well. I didn’t have a crystal ball so I had to figure something out.

Raven, like every business had “drivers”, numbers that indicated how well we were currently doing and how promising (or challenging) the future looked. We developed an Excel spreadsheet (scorecard) that became an invaluable tool for keeping track of critical numbers (sometimes called KPI or Key Performance Indicators). The scorecard was updated every Friday afternoon; here’s what it looked like:

There were other things we measured such as sales per direct labor hour, work center efficiency, etc. – you get the general idea. We measured the things that affected the bottom line of our business.

To accurately predict how the future will look in any business, good metrics are a must. Determine what 5 to 15 numbers you need to track, develop a scorecard, share the information with others in your organization and watch the positive change happen. When people know what you’re measuring they know how they can make a difference.

Good luck.

“Sometimes I get depressed about my age. In March I’ll be 26. If a man weren’t measured in numbers, but rather letters, I’d be turning Z. And then I’d be dead.”
– Jarod Kintz

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