You can ask this question from a million people and you will get a different answer each time. It is important to measure what makes your organization successful and understand what does not. When you are leading a business you need to have your finger on the pulse of the entire business. One missed moment can have disastrous consequences.
So how do you measure success? I think it all starts with selecting the critical areas of your business that need to be measured and put a metrics system in place to monitor performance so you can adjust when needed to ensure optimal performance.
Here are four measurements that every organization should look at frequently:
Financials: It goes without saying that every organization should measure and monitor their financial performance. Areas that can be examined are sales, expenses, payroll, and profit margin to name a few. The numbers that you decide to monitor may be unique to your organization but it is important no matter how big or small to understand the financial health and viability of your organization.
Marketing: Getting past basic ROI of marketing initiatives, organizations should also measure effectiveness. If you launch a social media campaign you have to define your anticipated outcome then measure if the campaign is giving you the anticipated results. Be it social media, email, direct mail, cold calls, or advertising, you must define the expected outcome and measure each campaigns success.
For example, one of the ways we use social media is to drive traffic to our site. In August 2012 we had about 150 page views total, in January 2013 we had nearly 3000 page views. I would say that this campaign is meeting our expectations and we will continue. However, if we have 150 page views in August and 170 in January then we would need to determine that our strategy is not meeting our expected outcome and the plan needs to change.
People: Your organizations performance can only be as good as the employees who support it. Most oftenemployee performance is measured once a year typically at the beginning or the end of the year. I believe there should be more frequent performance checks ins. If a problem performer is a problem performer in June, why wait to December to let them know it. Setting up an employee performance management strategy is a great way to measure performance and deliver feedback throughout the year. This does not have to be a time consuming process. Structured quarterly performance check ins is a great way to help monitor performance and ensure it is meeting expectations.
Most importantly, if you have a problem performer or someone who is not meeting expectations; you must deal with them. Put them on a performance improvement plan, give them all the tools they need to be successful and monitor their performance more frequently. If you find that they are still unable to meet expectations then this probably isn’t the job for them. Sometimes there are other places in the organization where they will thrive and sometimes there aren’t. Problem performers cause a ripple effect through a department or organization so if you find that you have done everything to help them be successful and they still are not, you will have to let them go.
Technology: In today’s organizations technology can greatly improve productivity and organizational success. Having a technology strategy for your organization can help you streamline processes, operate more efficiently, be more innovative and can give you a competitive edge. One you determine the technologies that will work for your business then measure their effectiveness. If you select a system that streamlines the order fulfillment process then you can measure order speed before the implementation and order speed after. If you start using a CRM to automate the sales process you can measure sales volume before and sales volume after. Technology is a very powerful tool and should be used to maximize your business growth.
As I mentioned above, your recipe for success may look different than this or anyone else’s. The important thing is to determine what it is, measure your successes and adjust as needed based on the results.