Can you figure out what really gets results?


How do you set things up so that you can get results?

Take an example that many people have to deal with – meeting sales targets for their business unit.

The results are expressed in monetary terms – you want to add X in sales by the end of the year, so what does that break down into by month, by week and by day – depending on how the business you are in makes its money.

If you are in a retail business, with transactions happening every day, then a daily system of monitoring profit and loss may be enough to tell you whether you are in or out of the money. Depending on how far away you are from target, then you can take action to change things.

In this case you are in a business where results can be measured in great detail, so you simply monitor the end of the process.

But what if you operate in a different kind of business – say you sell large and complex systems – power stations, for example, or provide ad-hoc consulting services. The results in such businesses expressed in financial terms may not be as predictable.

So what happens then?

The markets and analysts like companies with smooth lines trending upwards. They don’t like surprises or lumpiness in results. So, the companies give them what they want – managing their reporting so that you get the effect of a smooth line, even if the underlying business is lumpy.

This takes you from monitoring results to manipulating results.

The logical thing to do might be to consider the other end of the process.

If the results are hard to predict – you still need to do something every day to get them.

You need to pick up the phone, engage with someone, create something – the daily activity is what eventually produces those results.

Is it possible that measuring aspects of daily activity that correlate with results can help get results better than measuring the results themselves?

In other words, measured daily activity could lead to results which can then be measured in financial terms.

The point is this – in order to track how you are doing, you need to measure and monitor something every day.

There is no point in measuring something daily that does not lend itself to being broken down into a daily measure.

Instead, find something that you can measure daily that correlates with the result and measure that instead.

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