Authentic leadership is living on the front lines. It is making hard choices, strategic planning and following through with discontented clients. It is showing the way by taking action through systems and measurement.
According to the Hawthorne Studies in the early 20th century, the act of measurement influences the outcome of the measurement. Dipping a thermometer into a cup of coffee can change the temperature of the liquid being measured, the act of collecting data, where none has been collected before creates a situation that didn’t exist before, thereby affecting results.
In order to manage by numbers, you must track your numbers and become skilled at keeping score to discover if you are winning or losing. Some small business owners don’t want to keep score. Some think managing by numbers is negative. Would you go to a football, basketball or baseball game and pay big money for your tickets only to find out that both teams decided not to keep score?
To be honest, I don’t think you are in business to utilize your effort, time and resources without expecting to change, where necessary, to win. Business is as excellent or as terrible as you make it in your activity and mind.
The decision to take your business to the next level is one of managing numbers.
Here are a few of the crucial business numbers to follow:
Sales and Revenue
Gross Margin and Profit
Debt to Equity
Depending on the business you are in, there are many other numbers that reflect your company’s current strategy and goals. The above list will get you thinking about ways to look at your business, how to measure your success or failure. Loss is an impermanent situation if you are willing to change and suicide for those who refute reality.
With the new year just around the corner, now is the perfect time to take stock and start making plans. Even if you don’t make a New Year’s resolution, you can still jump-start your goals for 2017.
Patsy McManus has twenty-five years of experience in systems design and management. She has dedicated 10 of those years specifically to small business systems development and implementation. Patsy works hand-in-hand with her husband and author, Roger McManus, to counsel business owners in the exploration and development of the Freedom that actually gives the business a greater tangible value.