Category Archives: Strategy and Planning

You are Never too Busy to Make Money

Last week I was having lunch with a client who owns a substantial construction firm. His phone pinged during our conversation. He apologized for looking at it, but he was waiting to hear on a couple of large bids. “Dammit!” he … Continue reading

Posted in Business Perspectives, Customer Relations, Economic Trends, Sales, Strategy and Planning | Tagged , , , , , | Leave a comment

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The Migration from Service to Knowledge

As I have pointed out frequently in this space, the Baby Boomers’ entry into entrepreneurial business moved the core of the American economy from products to services. (see www.theboomerbust.com) Multiple dynamics created the shift. Boomers were degreed at four times the … Continue reading

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Who’s Picking Up the Tab?

When a small business is sold, the total price of the business includes not only the cash paid, but any obligations assumed by the buyer on behalf of the seller. Transfer of a loan balance, accrued vacation pay for employees or … Continue reading

Posted in Economic Trends, Exit Planning, John's Opinions, Politics and Regulation, Selling a business, Strategy and Planning | Tagged , , , , , , , , , | Leave a comment

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What Price Sochi?

In business, there is a danger that a big new project, landing a giant customer, or an unexpected personal event will draw your attention away from the job of running your business. When an owner is the driving force behind day to … Continue reading

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Measurement Isn’t Necessarily Management

“You manage what you measure” is axiomatic in business ownership. “Employees respect what you inspect.” Understanding performance and productivity by comparing it against past performance, industry norms or internal benchmarks is useful, but measuring something doesn’t mean that you are … Continue reading

Posted in Entrepreneurship, Strategy and Planning | Tagged , , , | 4 Comments

4 Responses to Measurement Isn’t Necessarily Management

  1. David Basri says:

    I would agree that putting too much credence into deep numbers analysis is counter-productive. Mark Twain’s quote that, “There are three kinds of lies. Lies, damned lies and statistics.”, comes to mind.

    However, over time analytics can indicate trends in employees. One who consistently performs below other employees in whatever KPIs are being measured, needs remedial action. Trends can indicate employees who have a propensity for too much, or too little, risk. And so on. . . .

    While it is no substitute for management, experience or intuition, there is a role for analytics.

    David Basri
    http://www.pointent.com

  2. Todd says:

    You assertion that “you manage what you measure” maybe accurate in the extreme of over measuring and producing an avalanche of data that hide the reality of a situation but “you can’t manage what you don’t measure” seems to be a bigger problem with small businesses.

  3. Joel Fay says:

    Yes. The quantitative stuff that’s easy to measure is often not the important qualitative stuff to measure.

    When you measure something in your business…you’ll probably get the behavior you expect, and then some…

    • Is the measurement of “sales time with customer” getting higher sales? Lower sales? Or, more sales of easier-to-sell stuff?
    • Is the measurement of “customer service time,” driving faster service, or more errors and irritated customers?
    • Is the measurement of ancillary sales creating an erosion of the core brand?
    • Is the measurement of errors, increasing the inspection costs of a process?
    • Is the measurement of an already low “bad debt” cost driving policies hurting customer relations?

    Measurement of stuff in your business can be good. Just be careful about what you measure, and how it’s implemented. Be sure to ask…

    • What’s the goal?
    • How much will it cost to measure it?
    • How will it help the customer and the sale?
    • And, what will be the unintended consequences?

    • John F. Dini says:

      Excellent response, Joel. Measuring the impact of measuring is a sensible first step. Too often we put in “controls” without sufficient thought to whether we will be controlling the right thing.

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