Do All Those Numbers Really Matter?

In the olden days – when I first dipped a toe into sales management – it was fairly simple. We recorded the number of calls our guys made, the average order value, the number of new customers and… that was pretty much it. And then every month we’d sit round a table and gradually cover it with a blizzard of paper.

Occasionally, a decision would float upwards and be acted on – but you know what? If I’m honest, decisions on the sales force were only one-third dictated by our analysis. The other two-thirds was gut feeling – unless there was a diktat from the top floor, in which case everything we’d decided was irrelevant anyway.

(More of diktats from the top floor in a minute…)

Now here we are in 2014. The year when you can measure everything. All the traditional metrics are still there – plus a myriad of new toys. How many people have visited our website? What pages did they click on? How many Twitter followers do we have? How many Facebook likes?

The list is endless. And the question is obvious – do all those numbers really matter? In fact, is there too much information? Are we in danger of having so much information that what really matters gets lost in the noise?

What we need to do as owners and directors of SMEs is cut through the noise. Twelve weeks today it’s Boxing Day, so I’m confident that your planning for 2015 will be in full swing and a crucial part of that planning is identifying the numbers that are important – and which are just noise.

Why? Because you can’t monitor everything. There simply isn’t time. You need to be at the Nativity Play remember? Not worrying about how many people from Chicago have clicked on your About page.

…Which – had it been available at the time – is what I would have been doing at Nestle. On the first Friday I was there I added them up: I’d inherited 25 ‘key’ performance indicators for my sales team.

Yep, the sales team was a massive overhead. So the diktat from the top floor was simple. Measure it to death. The problem was, the sales team had no idea what they should focus on. I’m proud to say I stripped the 25 numbers they wanted down to three monthly KPIs which never changed – and another three which did change depending on what our brand priorities were. The performance of the sales team improved significantly.

As many of you know, I talk to everyone I work with about the ‘pulse’ in their business. What are the key numbers you need to look at on a Monday morning? To some it’s money in the bank: for others it’s orders taken or new customers.

The key numbers vary enormously from business to business – and sometimes they’re not the ‘headline’ numbers. One of the most important functions The Alternative Board provides is to drill down into a member’s business and help them identify what really drives the business and which numbers determine the health – or otherwise – of the business.

So as you look ahead to 2015, how do you determine the numbers that are crucial to the success of your business? Rest assured that TAB will be tackling that in some detail between now and the year end, but the first step is simple. It’s to have a really clear idea of where you want the business to be in X number of years. Know that – and knowing what you need to measure and act on instantly becomes clearer.

And here’s my commitment. Whatever you want to achieve, however ambitious your plans, TAB will never saddle you with 25 KPIs. We’ll keep the numbers that matter short, sharp and focused – so that when you need to take action, you can take action.

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