This article was originally published on the EOS Worldwide blog on March 8, 2018.
Most entrepreneurs know well the feeling of “flying blind.” It can feel like you’re running your business and making big decisions on vague sensations, feelings and emotions rather than using data that helps you make a quick, but fully informed, unbiased decision.
During a week in which your company wins a big order, you get some positive feedback from an important customer, and finally find the right person to fill a key seat – it can feel like you run the best business in the world. As early as the following week – after losing a big sale, getting a nastygram from a longtime customer, and dealing with a few people issues – you can feel just as certain you’re running the most troubled company on the planet.
3 Steps to Strengthening the Data Component
Of course, in both cases, you’re typically wrong. Emotions run high when you’re running an entrepreneurial company, and when those emotions get extreme, they can cloud your judgment. That’s where a strong data component comes in.
As a card-carrying Visionary myself, I’d never advocate for dismissing the great gut feel most entrepreneurs use to make decisions. That raw instinct is extremely valuable, but I’ve seen firsthand that the best decisions are made when you temper that gut feel with real, objective data. Strengthening your data component will help you do that, without slowing down your decision-making process. Here’s how:
Step 1: Build a great leadership team scorecard. Identify and track 5 to 15 weekly numbers that give you an absolute pulse on your business. By looking at 13 weeks of history on each of those measurables at a glance, you’ll start to see patterns and trends develop that tell you whether or not a one-time event – like winning or losing a big piece of business – is really something worth reacting to.
Step 2: Build great departmental scorecards. Is there a handful of weekly, activity-based numbers that will give you an absolute pulse on your sales and marketing efforts? What about operations? Accounting and finance? Can you track leading indicators that predict desired results next month or next quarter? How cool would it be if your sales team reacted when sales proposals were off-track, rather than waiting until sales orders were off-track? Departmental scorecards are valuable because they provide leaders and managers with data that drives accountability for keeping numbers on-track and demands proactive problem-solving in the trenches.
Step 3: Make sure everyone has a number. Ultimately, you want everyone in your organization to be looking at a scorecard each week, and to feel accountability for keeping one, two or three measurables on-track. That connects each employee to specific actions that help the company achieve its vision, and execute on its plan. It helps employees to “self-manage” and proactively seek help from their supervisors when they’re off-track.
If you’re flying blind, consider taking these three steps to strengthen your data component. If you do, you’ll find that your business will become more peaceful, more profitable, and ultimately more fun.