Week 8 of the eight week plan: measure what matters

So here we are, the final week of the eight week plan.

Do you remember back in Week 1 when we looked at what we wanted to earn next year? Then Week 2 how we found the Gap……that yawning chasm between what we earned this year and what we want to earn next year?

Then we looked at pricing, marketing, waste and twodifferent ways of making the best use of our time. All in the name of closing that damned Gap!

If you’re late to this series and have time to read nothing else, read the Gap. I swear that number is the ONE thing that really gets us off our derrieres and into immediate action for the year ahead.

And that’s the magic of Numbers.

Done well, numbers can tell us how our business is doing, what we need to do more of, what we need to do less of, and what’s around the corner. But lots of us don’t like numbers much so we miss this piece of magic.

So in this final week of the eight week plan I thought we should take a look at ‘measures’ in an easy way.Truly, this is not as awful as it sounds. Stick with me.

Why measuring matters

First of all, and just in case you need it,  a little more incentive to get measuring.

There’s a terribly famous business guru called Peter Drucker who coined the phrase “What gets measured gets done”. And it’s so true.

You can try it out for yourself. On anything. Just see.

Let’s take something completely not businessy –  ‘weight loss’.  I’m absolutely not a weight management guru but I know this –  people who weigh themselves every single day stick to their regimes. They say ‘no’ to massive pig-outs because they don’t want their measure – the scales – to move the wrong way.

Now let’s look at a business example: Facebook “Likes”. If you have a Facebook Page your “likes” are what I call an ‘in-your-face’ measure. You can’t avoid seeing them. Whether you like it or not your Facebook page is ‘being measured” and very visibly. So guess what? In the spirit of ‘what gets measured gets done’ this gets us obsessed about making the measure  – our likes – better.

But that’s not always a good thing.

Let’s be honest, some small businesses spend a great wadge of effort getting their Facebook ‘like’ numbers high but don’t see any increase in sales.

They keep working on the Facebook ‘likes’ because it’s a measure they can easily find and watching it rise gives them a great sense of satisfaction. Conversely they don’t spend effort converting those ‘likes’ to customers because that’s not easy to measure.

Yes, what gets measured gets done, but it’s a truth that can be both good and evil.

So this is what you need to remember:

And for good measure (pun, groan) I’d also add this one in too:

What to measure

So I hope I’ve convinced you that ‘measuring’ is a great way to help you get the right stuff done. But what should you measure?

There are two things you can measure:

1.Stuff you do. I call this inputs. For example you might want to measure how much time you spend on marketing. This is an input measure. It’s useful because if you see your marketing time fall it’s a good indication that sales will slow in a few months time.

2.Stuff that happens. I call this outputs. This is where you measure the results of what you did. The ultimate output measure is your profit for the year – ‘all that work and this is what I earned!’.

And three useful measures:

1.A crystal ball to tell you what the future is going to look like. Examples include the number of enquiries, subscribers, proposals etc. Anything that’s a good indicator of future sales

2.A Harry Hindsight to tell you how things have actually gone. So how many did you really sell last week? What profit (approx) did you actually make last month?

3.A scientist to measure experiments. Everything new that you do in your business- a different marketing technique, for example, is an experiment. So you need to measure it so you can tell whether it’s been a success (or not).

What exactly you decide to measure is up to you. But here are some tips:

Tips for picking measures

Here are my top ten thoughts:

1.Pick just a few things to measure

2.Make sure they are real Crystal Balls, Harry Hindsights or Scientists.

3.Measure often  – you want the news before it gets too old!

4.Measure consistently – measures are better when they are compared to previous measures (that’s how you can tell whether it’s been a good week for instance, ‘cos it’s a bigger number than the week before)

5.This is not about bookkeeping – this is about measures that are useful to the way you run the business. Let the bookkeeper do the (boring) accounting stuff

6.Make your measures easy to find. That’s why Facebook ‘likes’ are so compelling – you don’t have to go to any effort to find them. What you want is the equivalent of bathroom scales for your business.What measures can you find with little or no effort?

7.Before you start an experiment decide what “success” looks like. When you’ve put a heap of effort in it’s hard to be objective and you’re more likely to settle for a lower success figure!

8.Write all your measures down so you can see week on week progress

9.Try a new measure for a few weeks. You’ll soon know whether it’s a measure worth measuring. Look at what it does to your behaviour. What does it get you to do more of? What are you doing less of? Is that good for business.

10.Chuck out any measures that don’t make sense to you.

The best way to start is with just two or three measures. Pop your top Crystal Ball, Harry Hindsight and Scientist into the worksheet here. Give them a go and simply change them if they don’t work.

Finally

So that’s the eight week plan. I hope you found it useful. If you do just one of the suggestions from each week you’ll be well on the way to making 2013 a different year.

And doing a few things differently might be all that it takes.

 

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