We are obsessed with measuring things. Everything should have a metric including human happiness. That’s OK as long as we are measuring using the correct criteria for each element. If we don’t, it can lead to problems.
When to get into the numbers – Donna’s Story
Donna (not her real name) has a company where most employees are paid a little over national living wage. She sells their services, and margins aren’t great in her industry. It’s really important that she forensically investigates how her sales and her cost of sales, particularly salaries, are tracking almost week by week. If she doesn’t, suddenly she’s losing money. She’s got metrics for every element of this. Small variations are investigated immediately, and any problems rectified. She needs good quantitative measures here.
Should she always use the same approach?
She also uses these measures for every other aspect of her business. So, she will forensically investigate variations in the telephone bill, or insurance premiums – in fact every profit and loss account line gets the same treatment. She spends ages on it. She’s also tired. She’s working 70 or 80 hours a week, making good money, but she’s missing family life and leisure time. It’s head down all the time.
Can she carry on like this?
This is not sustainable long term. She needs to get better life work balance and one way to achieve that is to decide which elements of her business need the quantitative approach and which don’t. For her, sales and her cost of sales really do need it. Most of the rest of her expenses don’t. They don’t change very much and if they do, they don’t make much of an impact on the bottom line.
Getting the balance right
When she gets some time off, she and her partner like to go cycling. They don’t go half as much as they want to, and her partner lets her know. More pressure. Understanding which numbers are not so important would relieve some of this pressure and get her some more time back. She’s forgotten, not what her goals are, but how to achieve them.
Time for a change
She rang recently and mentioned what a lovely day it was and how much she wanted to be able to jump on the bike for a couple of hours with her partner. She can. We talked about the downside of using the same methodology for everything and how limiting that is. She is now using different metrics for her office manager. These include a settled office team, who make more decisions so that Donna doesn’t need to, and time off in the week for her. She is more relaxed about her business. She’s realised that the same 5 steps to scaling the business for growth can be adapted to give her more freedom. Today she’s gone for a bike ride.
Are you stuck in that rut too? Would a different approach help you get what you want more easily? Life is too short to waste it on the wrong priorities. We can help you just as we have helped Donna and others like her. Email email@example.com .or call 01202 520010.
At Hixsons we make sure our clients are agile, flexible and resilient so that they are better able to respond to shocks. In the spirit of helping our business community we have resources in our learning centre where you will find various tools and templates for your business. We do not ask for your data and it’s completely free.