Focusing on the financial numbers related to increasing revenue, cutting expenses and improving the bottom line are important metrics related to running a successful business. But as an owner, executive or manager have you ever felt that you might be missing something? Hey, I’m the first to admit that when I was running Porter & Associates the first report that I would review each and every morning was the number of hours we billed the previous day. And at the end of each month I’d quickly turn to the page in my report that showed the month’s income (after payroll and indirect expenses). Then, I’d jump to the page that listed the agency’s current assets and current liabilities. If only the video, below, had been available back then!
So how is lack of awareness affecting your ability to effectively run your department or business? In large part, awareness is a function of where an individual places his/her attention or focus. For example, not too long ago my wife and I purchased a Toyota RAV4. Frankly, before Susan made the suggestion I’d never noticed them on the road; but guess what happened the moment she mentioned the name? And now, as we drive our shiny new car around town, I swear I can eye-ball a RAV4 that’s 20 blocks away! But because I’m so focused, I’m really not looking for anything else; therefore I’m missing a lot of all the other stuff that’s happening on the streets (on the outside chance my insurance agent is reading this, I’ve had no accidents so far).
So, for example, if your company’s differentiation strategy is to be “customer centric”, and if you’re only using the information provided in financial statements as a metric of how well you are achieving that goal – what can you do to ensure that you don’t miss something you’re not looking for?
Based upon my experience, in addition to the reports you currently review, you should expand your perspective and awareness by analyzing the company’s return on its most important assets: Return-On-Customer (customer share-of-wallet, customer loyalty, customer complaints); Return-On-Employee (employee say/do ratio, employee engagement, employee turn-over); Return-On-Vendor (vendor say/do ratio, vendor survey); and Return-On-Brand (premium pricing, culture audit, marketing research).
Like the moon walking bear, it’s easy to miss something you’re not looking for … unless you shift your attention. What customer centric metrics should your company pay attention to?