How do you identify your company’s major growth opportunities? While it’s tempting to take the easy route, resist the urge to only follow your gut. You might get lucky a few times, but long-term success requires a thoughtful analysis of your employee’s performance, sales, and financial results. Many business owners do this by keeping track of key performance indicators (KPIs).
We live in a world today that’s increasingly driven by data, and in business there are hundreds of ways to track KPIs, but for most businesses it’s not necessary to measure all of them. Tracking irrelevant KPIs will only distract you from focusing on what matters and increase stress around numbers that have no impact on your company’s growth. But analyzing the right metrics is vital. They can help identify strengths, weaknesses, opportunities and problem areas.
Follow these steps to make smart data-driven decisions and identify growth opportunities for your company:
Step 1: Identify Your Key Objective. Having a clear objective is essential to successfully evaluating your data; it’ll be your guiding point. Your Key Objective should focus on your product and the core value it delivers to your customers. This can be as simple as the number of roles filled, acquisition of new clients, or engagement of existing clients. Your objective should promote the direction you want your team to focus.
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Step 2: Brainstorm Behaviors (KPIs). Now that you have your key objective defined, brainstorm a list of measurable behaviors that could cause it to improve. This could be a single behavior, or in most cases, a series of behaviors. For example, if your key objective is to increase the number of roles filled, a behavior might be:
- Promote a new job post once per day
A series of behaviors for the same objective might be:
- Add recruiting power
- Message 5+ new qualified candidates per job per day
- Post to job boards once per day and social media
Step 3: Gather Data & Run an Analysis. With your key objective in mind, begin gathering data on a monthly basis, based on the related KPIs you landed on. This can be rather complex if you’re analyzing multiple behaviors at once, or you can keep it simple by analyzing them separately. After enough time has passed you should begin to see patterns. The KPIs with the strongest correlation to your key objective will become your growth metrics.
Step 4: Maximize your Growth Metrics. After analyzing your data and identifying the top behaviors – focus all of your optimization efforts on those growth metrics. You can do this through incentives with your team, keeping the numbers visible throughout the office, and celebrating milestones or specific people who have gone above and beyond goals related to KPI behaviors.
Step 5: Monitor Metric Health. Now that you have an established tracking system, you’ll slowly become less interested in your KPI trends and more interested in benchmarking the activity levels. It’s at this stage you’ll begin looking beyond the numbers and focusing on the output (your value). Search for factors that can strengthen your end product, or value, to increase your opportunities even more.
Step 6: Re-evaluation. Remember, your business is always evolving. Your growth metrics are not static; they’ll change with your business and you should be re-evaluating them from time-to-time. The good news is that once you have an established process, your KPIs will be a good indicator of when something is no longer working, keeping you a step ahead.
On a final note, remember to not get too caught up in all the data that’s available. Choose the metrics that are most relevant to your business and monitor them on a regular basis. Use this information to look ahead and track goals, but also to look back and pinpoint issues. The most important thing to do is not spend hours analyzing your data, but take the information you learn and turn it into action.
