Identify Critical Metrics to Gauge Business Plan Success
Having a well-thought out business plan is one of the most important keys to success. But to know if your plan is working as planned — and to identify where you need to tweak or change course completely — you need to measure your results. Business gurus use the term metric, which basically means any unit of measurement.
The most obvious business metric is profit. If your company is making money, you’re doing fine, right? Maybe.
Profit is only one metric. For a company that depends on the creativity and drive of its employees, morale may be just as useful a metric. For a service business such as a hair salon, customer satisfaction is a critical metric. For a company that sells highly precise instrumentation, quality control scores are the central measure of success.
Don’t assume that choosing the appropriate metric is easy. In fact, one of the biggest industries in the world, healthcare, has been struggling to do exactly that.
In the United States, healthcare metrics have tended to focus on what the experts call process — whether a doctor appropriately prescribed a blood pressure medicine to patient A or ordered an ultrasound for patient B. In some other countries, healthcare metrics focus on resources. A hospital gets top grades for having a certain percentage of nurses with advanced degrees or a certain number of MRI machines per 1,000 patients.
Trouble is, those metrics don’t really say whether the treatment was a success. Patients don’t care whether the nurse has advanced degrees or the hospital boasts a lot of MRI machines. They want to get well. So a new movement is underway to develop outcome measures based on what patients care about — how well and how quickly they recover, whether they experience complications, and whether the treatments are effective long-term.
The appropriate metrics vary widely from business to business. To come up with the best measures to gauge your success and guide you in the future, you need to think about all the aspects of your operation, including customers, employees, your public image, your production process, and more. Take the time to consider every angle of your business operations.