There are lots of concrete things business owners can do to measure the performance of their businesses. You can measure profit and loss, the number of clients you have, your market share, or the number of widgets that you can produce in a day.
These are all important measures that can be seen in black-and white reports, but there are other less tangible items that should be also be measured.
Most business owners have a feel for how some of the more intangible factors are helping or hindering their performance. The problem is that a feeling is not an accurate enough measure of important factors like:
- brand/name awareness in the community
- customer satisfaction
- employee morale
- systemization of your business
- cutting edge ideas
All of these factors are vital to the long-term success of your business. It is not easy to quantify some of these subjective categories, but think of yourself as a judge in an ice skating event. There is no black-and-white measurement of performance on ice, a bunch of judges hold up numbers and the other competitors can be judged plus or minus that score. You must do the same for your business.
Take a topic like employee morale and score it from minus ten to plus ten with zero being neutral—where you have as many unhappy as happy employees. Where do you stand right now? If you are not well into the plus side, you have problems.
Let’s take a statement that might be part of our strategic plan like, “We are a cutting-edge company in our industry” and try to measure it in a way that makes it more tangible.
Here are a few of the questions we ask at Legendary Marketing to measure that intangible statement on a scale of minus ten to plus ten.
- Do we visit our competitor’s websites once a week and look for new products or services?
- Do we scan the trade magazines and trade websites to look for mentions of what they might be doing?
- Do we attend industry trade shows and events?
- Do our people attend seminars and conventions to increase their knowledge?
- Are our staff reading books and listening to audios that increase not only their job-specific skills, but more general skills like time management and communication skills?
- Do we look outside our industry each month for ideas that we could apply to our business?
Do we come out with new products and ideas at least once a quarter?
- Do we effectively communicate our forward progress and leading-edge status to our employees?
- Do we effectively communicate our forward progress and leading-edge status to our clients?
- Do our clients and prospective clients view us as a leading-edge company based on the comments and emails to or about us?
- Do we upgrade our internal technology every quarter to improve the speed and performance of our employees?
By reviewing each of these questions each month, we can come up with a number and measure our relative performance as a leading-edge company. There are lots of other areas in which we try do exactly the same thing.
Tracking and measuring these intangibles will only make your business a better place to work and a better functioning, more profitable business. Think of all the factors in your business that would be good track, then follow this system for doing it. You will quickly discover that what gets measured gets done and that it quickly gets done better.
What gets measured, including the intangibles, gets done—better.