As a business provider, it’s important to see what is working for your business and what isn’t. So, how do we define how effectively we are meeting our business objectives and goals? Measurement! Here are three things all companies need to measure.
1. FINANCIAL SUSTAINABILITY
An investment in knowledge pays the best interest -Benjamin Franklin-
If you develop a mental block when faced with endless pages of financial data, you’re not alone. It’s helpful to understand exactly what you are looking for and measuring, so you don’t get overwhelmed by the numbers. There are many areas we can measure as a company, but understanding the profitability and financial position of our business is usually at the top of everyone’s list when it comes to measuring a company’s growth and short and long-term viability.
Financial Ratios are the most common methods of analysing a company’s financial standing. The main advantages are that ratios are easy to understand, and the data can be used to compare different companies over different industries. There is a vast range of Financial Ratio analysis data which can assist you to measure different areas. These include profitability, liquidity, efficiency, solvency, market prospect and financial leverage and coverage ratios. If you aren’t sure where to start, consider the courses offered by the Australian Institute of Company Directors either face to face or online.
2. TEAM MEMBER SATISFACTION
Team members who believe that management is concerned about them as a whole person – not just an team member – are more productive, more satisfied, more fulfilled. Satisfied team members mean satisfied customers, which leads to profitability. – Anne M. Mulcahy, former CEO of Xerox-
While our go-to measurement of success is often based on revenue growth, at the core of that growth and your company’s success, is your workforce. It is crucial to invest in your team members and developing a healthy sustainable company culture is more important than ever. If your team members are happy, feel supported and they have adequate training in both ‘soft’ and technical job skills; it goes hand in hand that they will have higher job satisfaction, be more productive and your business more profitable.
There are several tools which are useful in measuring team member satisfaction and that will provide an insight into your workplace:
Regular one on one team member performance reviews are a fantastic way to hone in on the specific needs of your team members and provide an overview of your workplace. Retention levels will give you an insight into satisfaction levels, with lower than usual retention or a higher than average record of errors, highlighting a possible problem. Issues your team members may be facing, increased pressure and stress, not having adequate systems, training and or support. The nature of increasingly shorter-term contract work and the impact on security, can also directly impact productivity and job satisfaction. Likewise, understanding your team member’s goals, values and strengths; what they want to achieve in their current job and what their aspirations are for the future, show that you are invested in them as individuals.
The nature of performance reviews has shifted to more frequent coaching and feedback sessions, with companies like Atlassian, Google and Deloitte all moving away from annual performance appraisals. https://hbr.org/2016/10/the-performance-management-revolution Take out tip; train your leaders to coach and provide feedback on a more regular basis against agreed performance outcomes.
We want honesty; but from a team member’s point of view, telling management how things need to be improved may not always be the best policy. One workaround is to adopt an anonymous suggestion box where team members are encouraged to speak their mind. It allows for an open and honest communication channel where issues and suggestions can be brought up. This can be manual or electronic.
Team member Questionnaires and Engagement Surveys
In a similar way to the suggestion box, team member questionnaires and surveys use a selection of measurable questions to record and compare data. We can help you make up your own using google forms or www.survey monkey.com or alternatively, you can benchmark against other companies by consulting with www.greatplacetowork.com.au or https://q12.gallup.com/ Gallup.
3. CUSTOMER SATISFACTION
Your most unhappy customers are your greatest source of learning. – Bill Gates –
Customer satisfaction tells us if our customers are happy with our products/services and if they are likely to purchase them again. So, how do we measure if we are satisfying customer needs and how they view us? The Net Promoter Score or NPS is the easiest 2 step formula to use and allows benchmarking against companies globally.
A shift away from defining customer satisfaction to focusing on how to create customer success, lead to greater insights in optimising the customer experience after journey mapping activities with a recent client. For more on cx and journey mapping using AI, check out the work IBM is doing with IBM Watson and data analytics to optimise the customer experience.
Customer retention rates are a key indicator of a company’s success, for a good reason. A loyal customer is worth their weight in gold, both in sales as well as referrals. It’s up to 25 times more expensive to develop new sales leads than keep existing customers.
Surveys, reviews and looking towards your online and social media presence will provide you with a direct link to how customers are viewing your company as a brand, your customer service and your products and services.
Complaints and the rate of escalations and resolution will help highlight any problems involving your products/services, your team members or the company as a whole, so make sure you are tracking these.
Ultimately, whether handling staff, customers or suppliers, as Maya Angelou is often quoted as saying, “… people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” So make sure you and your products and services are set up to leave them all feeling good about working with you. And if you aren’t sure how drop me a line or give me a call to organise a catch-up.