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Thinking of re-organizing your business? What you need to do first.

Higher profit margins, increased customer satisfaction, a more attractive HR brand are some of the obvious reasons you are considering organizing your business.

Defining goals and metrics

Before starting improvements and simplifications of business processes in the company, it is worth determining the goals that you want to achieve. The optimal number of targets is from three to five. Answers to the following questions can help in their formulation:

  • What part of the business needs improvement the most?

  • Changes in which areas of business will bring greater impact to the company?

  • By changing what business processes will we improve the day-to-day work of the company?

  • What simplifications will lead to successful company results?

The answers to the questions need to be transformed into goals, and then the metrics that are appropriate for each goal must be determined. For example, if one of your goals is to improve your customer experience, one of your metrics might be to reduce the time to generate a monthly client report.

Do not limit yourself to standard indicators, create your own for the working conditions of your company:

  • Reducing the number of approvals when making a hiring decision

  • Reducing the volume of internal iterations

  • Reducing the time in irrelevant chats

  • Reduction of accounts receivable over one week / two months

  • Improving the financial discipline of a group of key clients

  • Increase in the number of business meetings

  • Increase in the number of commercial offers made

The next step is to check the consequences of implementing metrics, i.e. how the metrics will affect the performance of individual employees: will there not be a substitution of business improvements for the achievement of the desired indicators.

For example, you want to increase the average customer check. Make sure this metric isn't pushing people to blindly reduce customer numbers. Rejecting clients with a smaller check without replacing it with a client with a higher check will lead to a drop in revenue, an increase in costs per client, and a decrease in profitability. Therefore, consider balancing the scores (for example, increasing the average check without decreasing the number of customers) so that they do not potentially lead to side effects.

Implementation analysis

A very important step is to define “where you are”, “where you want to be” and after how long. Those. what is the state of the indicators at the time of the start of implementing changes and your target indicators to which you are striving to come within the time you have defined? For each metric, the baseline, endpoint, frequency, and duration of measurements should be defined. For example, an increase in the customer's life cycle. The average customer life cycle before implementation starts is 3 years and 5 months.

When building a system of goals and indicators, strive to balance what I desire and what is achievable. There is nothing worse than setting unrealistic targets on the road to delivering business improvements. Metrics should be out of your comfort zone, but possible to achieve. Success will accumulate and give a new powerful impetus to subsequent implementations, and in this case, you can set the following more ambitious goals and metrics.

Well-chosen metrics will support your business implementation, structure it and stimulate positive change. They will also be proof of your success.

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