Measure Current Performance

Posted by: Rod Kurtz on November 12, 2009

In today’s tough economy, every dollar counts. Yet do you know how your business is really performing? How your company might compare to the norms for your industry?

Many entrepreneurs tend to operate by instinct, with no measurements in place. Establishing productivity standards, with performance metrics by product group and by customer, is a first step to track actual performance. To get started, you should evaluate every client account and define the minimal number of distinct tasks it takes to service the business. The key to being effective is not to get caught in creating too many tasks. Even with highly complex operations, the task count should be as small as possible.

Through observation and logs, you can determine over a two-week period the actual time and labor it takes to complete the total tasks. Your current average productivity measurements could be represented as units per man-hour.

The key is to keep it simple. But the creation of performance metrics will help establish predictability and give you better control. You’ll have a way to gauge how well your business is doing today and how you can improve it for the future.

Chris Carey
President
Chris Carey Advisors
New York

Reader Comments

Malcolm Gallagher

November 16, 2009 3:24 AM

Chris is so right about too many firms operating by instinct. The problem is that, for too long, measures such as KPIs have tended to be in the domain of the accountancy world and so remain unexciting. We push businesses to "com pete to win" by knowing the dynamics of their measures such as helping them think innovatively. That's when it gets exciting for them and that's when they respond best.

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