Measure What Matters
When my daughter was young, we opened her first bank account. We went to my bank, opened an account and she made a small deposit. All the way home she held tight to her shiny new bank book. Back then they even imprinted her name on the cover. It was hers and it contained all her money.
Every two weeks, or so, we would return to the bank with money earned from odd jobs and babysitting. After each visit, we had a small ritual.
I would ask what the new balance was. She would smile, open her bank book, scroll to the latest entry, and proudly read the new total.
Month after month, little by little, her balance grew. And it grew because she paid attention to it. As Tony Robbins would say, “Where focus goes, energy flows.”
What are you paying attention to in your business?
Pulled in every direction
Running a business can make you feel a little like Gulliver tied up by Lilliputians, pulled in every direction by ropes you can’t see. Little details of running a business, as small as they might appear on their own, can pull you away from the bigger, more important goals.
It can look like this…
As you sip your morning coffee you open email threads that threaten to steal most of your morning. Needing a distraction you check your social media feeds, leave a few voice mails with clients, start preparing for a team update, and then wonder if maybe your website needs a refresh.
Even the smallest of startups can become a monster of overwhelming machinations all vying for your attention. “You must choose,” warned Grail Knight in the 1989 Indian Jones classic, “but choose wisely”
Your time and energy will always be limited while the distractions of running a business will always be unlimited.
It starts by measuring what matters.
A dashboard
Just as driving your car without a dashboard would be dangerous. Running your business without one is deadly.
In my last business, I started with a simple spreadsheet to track performance. Across the top, I labeled columns with titles we all understood: leads, sales, email list, website traffic, and social media. I called it our Performance Dashboard and assigned a team member to update it every Thursday.
At first, it was a manual exercise of digging up each total and adding it to the spreadsheet. Eventually, we added some simple tools to auto-feed the numbers and changed some of the metrics.
For example, LinkedIn outperformed all other social channels for generating leads, so we stopped tracking them. Similarly, we replaced average client value with lifetime value because it was a better measure of our sales efforts. Like focussing a camera lens, each refinement gave us a clearer view of our company's health.
That simple dashboard also changed our team conversations and the decisions we made—finally, we had accurate numbers giving us feedback on our efforts. I have no doubt it was also essential for attracting a buyer to the business.
What about a dashboard for life?
Dashboard for life
If you want to create a change in your life, create a dashboard.
I want a consistent routine of exercise in my life, so every day I track my exercise on a calendar. I wrote about this routine in this post. My goal is an average of one hour of exercise a day.
When I wrote my book, I had a weekly target of 5,000 words so I tracked my progress on a simple spreadsheet. I blocked an hour every morning to write until it was done.
A client I worked with last week uses her meditation app to record how consistently she takes time in the morning for her practice.
It’s all about creating small wins, tracking the results, and making progress.
A Small Win
If you’re building your first business dashboard, start by asking what someone buying your company would want to see. A purchaser only wants to see the most valuable performance measures, like client churn, MRR (Monthly Recurring Revenue), product or project profit margin, etc. Start there.
Next…
- Create. Keep your dashboard simple. Open a spreadsheet and label some columns.
- Update. I recommend every business owner start by updating their dashboard manually. Sure you can geek out with API’s that grab shopping cart data, feed it to your CRM and spit it back to a Google Sheet. But, now your focus is on keeping that spiderweb from breaking. Keep it simple, once you know what data is meaningful you can automate the collection.
- Modify. It will be wrong. You will either have too many numbers to track, or the wrong ones, or both problems. Don’t be afraid to ignore certain metrics if it means others get more attention.
My guess is you already measure performance. It might be quarterly sales, website traffic, or pull-down reps at the gym. Those mini dashboards motivate you and keep you focused. If you want change or growth in other areas of your business or life, create a dashboard.