In order to be as efficient and competitive as possible, small to medium-sized enterprises (SME’s), large Business’s and Not-For-Profit Organisations must do things differently.
The key is to find the fastest route to achieve greater value for less cost, and innovate.
Adopting an appropriate data driven culture to drive growth, deliver higher profits and maximise resources and investment is part of the innovation!
Most large organisations already run business by data, tracking performance and constantly reviewing results. Using the outputs to set strategy and drive the organisation forward. To demonstrate how important Key Performance Indicators (KPI’s) are. The government has recently invested £189m in development of the data infrastructure and it publishes more than 10,000 public data sets every year.
In SME’s a large set of KPI’s can be burdensome. However tracking key critical to the business metrics backed by a relevant set of Monthly Management Accounts can fundamentally change you’re decision making.
Profitable product lines and services can be identified, wastage eliminated, cash flow tracked and forecasts projected and managed against. This creates informed decisions rather than gut feel and puts you in control rather than reacting to the circumstances.
As a business owner, ask yourself these two questions:
- Do I know how profitable each area of my business is?
- Do I know where the growth in the business has and is coming from?
Management by data is factual. Allowing day to day activity and longer term strategy to be relevant to the needs of the business.
Management by gut feel is never a comfortable place to be and can lead to constant firefighting.
Measuring the performance of your organisation is key to informed review allowing you to adapt your plan and achieve your goals. Giving greater control over profit and cash. Maximising the resources and aspirations of the business.
About the writer:
David Hurley is a Business Coach for Pro-actions.