Having decided which parts of your business you need to be watching, which parts of your business machine are critical to its survival, you must ensure that you are gathering and looking at these numbers on a regular basis (see Chapter 6: Reading Your Dashboard Correctly). To use a driving analogy again, you can’t be sure that your business is going in the right direction and at the right speed if you’re not looking at your dashboard and out of the window, and your numbers represent the readings on that dashboard.
Now, running a business is more complicated than driving a car, so, if you prefer, you can think of your dashboard more like the cockpit of a plane; it’s just a metaphor. The point is that having established which numbers are important to your business and how those numbers are to be determined, you have to make them accessible to be useful. You have to make sure that you look at those dials with the appropriate frequency. When driving your car, you don’t spend all your time looking at the dashboard and not looking at the road as that would be stupid. Similarly, not looking at your speedometer whilst travelling along roads where there are a variety of speed limits is a quick way to some penalty points on your driving license.
Now, don’t expect to know which are your all—important numbers immediately, it’ll take some time, some trial and error and some experience to know what’s important and when. Also, not all numbers are equally important, so you need to be paying attention to some numbers more often than others. Oh yes, and as was stated earlier, which numbers are important depends on what your business is doing at the time. For example, knowing the daily £ to $ exchange rate when you trade regularly in Europe is not important; the £ to € rate is the one you’ll find most useful.
Embedding a review of your chosen numbers into your planning meetings (see Chapter 3: Planning Properly) means that you’ll always have time put aside to look at them. After all, it takes effort to gather the numbers, you might as well use them. Your critical numbers can exist at many levels and in many areas of your business, and can change over time, and you have to think this through if you want to increase your changes of business survival.
What is important to you at the start of your journey may not be important to you at the end — Change when necessary.
Some of your numbers will become more or less relevant in predictable ways throughout the year, e.g., delivery times may change every time that there is snow and ice on the ground, sales of ice—cream will increase dramatically when the temperature is above 20oC (68oF), etc. Others will do the same as your business grows. For example, it may be crucial to monitor the sales of your different products when your business is growing, to determine what is the most popular, the most profitable, and what is not. Later, once your income streams have stabilised, this might not be quite so important. It’s up to you and what you look at on your dashboard may well have to change in tune with your changing business circumstances.
Another consideration is that who wants to look at what will be different within different parts of your business. For example, your senior management team will be wanting to look at the cash flow, balance sheet and P&L regularly, whereas stock levels and available personnel would be two of the most important items for the warehouse manager to be monitoring.
Some numbers will be more appropriate for some of your people to look at than for others. For example, even though the amount of cash that you have may be your most important number to monitor, you might not want your entire team looking at those very same numbers! It’s ‘horses for courses’ and, even though it would be so much simpler to have one dashboard, the world rarely works like that. Each dashboard must be tuned to its function, and that can be hard. Whoever said that management was easy?
Achievements drive your business forward and assigning numbers to them is the best way to provide the evidence necessary to prove that your business is doing well. The final output of all this monitoring and measurement, all your number collecting, is data (singular datum). Collected together on your dashboards, these data represent the life signs for your business. Monitoring your dashboards is the equivalent of you keeping your finger on the pulse.
It’s hard to get a square peg into a round hole
You will have noticed that data comes with a variety of units. In other words, what is that value a measure of? Well, if the measure is time, the units will be hours, days, months, etc. If the measure is sales, then the units might be currency, or it might just be ‘units’ where ‘one unit’ is one of whatever it is that you produce. The reason that thinking this though is important is that you must have consistency within your measurements, otherwise you will not be able to compare one measurement directly with another, leading to potential misunderstanding and failure.
For example, if your production team is measuring in feet and inches and your assembly team is measuring in metres and centimetres, do you think that there is a chance of confusion? If your buyers order apples in 1 tonne units and your shops sell apples by the 1 apple unit, could there be misunderstanding? Of course there could, so standardise the units that you use to measure achievements within your business.
One final consideration; your data, as presented on your dashboards, provides the input to the next process in the management steering wheel, which is TINA’s Analysis sector. In essence, analysis puts data into context and then extracts meaningful information from it, which can be used to make your informed decisions. Having non—standardised units for your measures will interfere with your analysis, producing data that is somewhat less than accurate. Make sure that the output from your numbering (your data) is in a format conducive to analysis. Avoid making a square peg for a round hole.
Setting up your systems to collect your numbers and get them into your dashboard is hard work. Establishing dashboards at the different levels and in different parts of your business is harder. However, the good news is that once you’ve put the effort in, getting hold of the numbers that you need to make your business decisions becomes straightforward and relatively easy.
Each time you complete a form (update your dashboard), it represents a snapshot in time of how your business is doing. If you imagine that your business journey is a film, then each snapshot is a frame of that film. But a set of snapshots do not tell a story. The snapshots must be run in sequence, in the right order and at the right speed, to convey the narrative that sits behind them. Looking at your dashboards one by one is better than nothing, but is nowhere near as good as looking at them together, and we’ll cover this in the next chapter.