In the seminal book, “Good to Great”, we learn that a company doesn’t need to be in a great industry to become a great company. To do so, it requires a very candid and strategic analysis of the various components contributing to the firm and then rating them versus a theoretical ideal. It takes effort, but you can improve your company, regardless of size, by applying these principles:
Define what robust, good health looks like for our company
Identify the Key Performance Indicators (KPIs) that indicate our progress
Make the changes necessary to close the gap between where we are and where we want to be
How’s Your Health?
In our C12 Groups, Members work together to develop a picture of what we call robust, good health for their businesses. This is a theoretical snapshot of what the business would look like if all of its resources were focused on its sweet-spot in the market(s) it serves, producing maximum returns. It takes effort, but by reducing complexity to simplicity, you create competitive advantage.
Know Your Numbers
Once you have defined what robust, good health looks like for your company, it’s time to measure where you currently stand in key financial, organizational, operational, and even ministry areas.
By defining the gap, we can identify a set of critical numbers, or KPIs, to direct our ongoing efforts and measure true progress. As you do so, keep in mind the following:
Reduce the amount of KPIs to a simple, measured few - Keep the number of KPIs manageable. Avoid the trap of tracking too many KPIs, scattering your focus over too many areas. Do the hard work of reducing complexity to simplicity.
Measure regularly, usually on a monthly basis - The frequency may vary based on the KPIs and your business. The key is a continued focus on what you have identified as the most important indicators.
Involve the Team - Make sure the entire organization is clear on what measures really matter, and how everyone contributes to each. This ensures every employee knows how winning is defined in their area.
By reducing the KPIs to simple, measured few, and measuring them regularly, the company will trend in the direction of robust, good health.
How Do You Measure up?
It’s not enough to just identify the KPIs that indicate trends. We must make changes to the strategy or process to close the gap. Our initial KPIs indicate the level of performance our current strategy, systems, and processes have produced. To begin trending upward, changes to the strategy, systems, or processes must be made. If our current way of doing things have resulted in a gap, changes in the process will change our trends. By continuing to focus on the right KPIs, we can determine which direction the business is trending, and make adjustments as needed.
Identifying the right KPIs and consistently monitoring trends requires focus and accountability. That’s why thousands of business owners and CEOs gather together once a month to share their experience and gain insight into business best practices as they build great businesses for a greater purpose.