How do you drive and measure success in your business? When you look beyond the bottom line, past the profits and margins, how do you really understand what is working and what needs to be improved? When was the last time you really evaluated what information you use to run your business? There are three key steps to knowing how to drive business while accurately measuring, trending and reporting information within your textile rentals services company.
1. Understand What to Measure -
There are two parts to understand what you need to measure for your business. First, you have to really evaluate your end goal and make sure that the entire company is focused on meeting that goal. We refer to this step as “Creating the Vision.” Many executives confuse having a vision with having a mission but they are two separate entities. A mission is what you want to portray to the outside world. A vision is the goal that all internal teams should work together to achieve.
Some vision statements we’ve seen recently include:
- As a team, we will achieve a combination of growth and profit equaling 25% annually.
- “5% annual growth by working together as one team.”
- “Become a $25 million company over the next 15 years.”
- “Achieve 5% growth and 25% profit over the next five years.”
To create a vision for your company, make sure you are thinking from a broad perspective. We typically recommend that both growth and profitability are included, but before deciding, do a SWOT analysis of your company. Take a look at your external strengths (S) and weaknesses (W). Then, review your internal opportunities (O) and threats (T). You want to make sure that your vision is a goal that every department can impact. Don’t be afraid to dream big – your goal should be a stretch but attainable with the help of your team. The process of creating your vision should not be taken lightly. Rather, it should be the foundation of all major decisions. When faced with a challenge, use your vision as a guiding light to make your decisions instinctively.
Once you have a vision, the next step is to create a list of key performance measures or KPMs. Each KPM should connect to the vision so that the entire company is focused on meeting that goal. Separate KPMs should be set for every level of the organization, from the management team, to each department, to each individual. Make sure to remember the SMART principles when creating your key performance measures. This means your KPMs should all be specific (S), measurable (M), attainable (A), realistic (R) and timed (T).
For example, if your company vision is to achieve a combination of growth and profit equaling 25%, one KPM for your management team could be “To realize a $350 weekly increase in new revenue.” Each department would have their own KPMs showing how they can contribute to the company’s vision. An example of this for the service department could be “To contribute $150 weekly increase in route sales.” This further filters down to an individual’s KPM. To continue with our service department example, one of the KPMs for a route rep could be “To sample two new products per day.” The service leadership team should be checking that the sampling was completed during their one-on-one route check in meetings. Tracking KPMs will allow you to properly trend and watch the changes in your organization.
2. Institute Accountability
Once you have your key performance measures in place, focus on instituting accountability from the bottom up. Individuals should be held responsible for meeting their objectives. Managers should work with individual employees to make sure they understand their KPMs and are given all the tools and resources needed to meet their goals. Many of these discussions should take place during one-on-one meetings and should focus on changing the behaviors that drive the results. Further drive accountability by publicly posting actual goals and results. Put them on a bulletin board, showcase them on a big screen, whatever it takes. Be very granular in this process. For example, use names instead of route numbers when showcasing the results for route reps. We want the team to cheer each other on and hold each other accountable. In addition, we utilize a proprietary tool called the playbook. The playbook breaks down each KPM and records who is responsible for each action and when it is due. Each project we undertake has its own playbook and is continuously updated so that entire team is aware of the project’s status and how each team member is performing.
3. Common Incentives
Another important point is to create common incentives to produce a single “goal-focused” team with similar agendas. All too often we see departments whose incentives are misaligned and sometimes even conflict with each other. Focus on the solutions together in order to fulfill your vision. For example, going back to our sample vision of achieving a combination of growth and profit equaling 25%, a production team might be incentivized by offering a bonus to the team if the company hits their growth goals because this spurs the production department to maintain appropriate inventory levels to support the sampling efforts of the service team.
4. Celebrate Successes
Make sure you are celebrating the successes of your team along the way. Publicly recognize employees who have met and exceeded their key performance measures. Reward departments who meet their goals and even commemorate key milestones on the way to your vision with company-wide celebrations.
Driving success is much easier when you’ve got the whole team on board. Understand what to measure by creating a vision and implementing key performance measurements. Institute accountability to drive results and don’t forget to celebrate the successes along the way
CEO / Founder