This post is one in a series designed to help SME businesses benchmark their business and create a best practice business improvement plan across all of their business processes. You can find the links to the full series here.
Why is it so important to continually measure and review operational performance?
What you measure, you can control! What you don’t, you can’t. Measuring the key activities and numbers in the business, be they financial, customer satisfaction, operational measures (such as sales conversion or leads generated, or production utilisation) or staff absenteeism, allows you, the business owner and manager, to better understand and manage the business’ performance. This also allows you to set improvement goals, and activities to achieve higher revenues and growth. Your competition is not standing still…. Neither should you!
How does your business measure up?
Here’s a checklist to help you determine how well your business meets this benchmark.
- We can check at any time our profit, sales, expenses, cash flow and operational measures.
- We review our financial and operational business performance at least monthly.
- We have a set of key performance indicators that our management and staff use to better understand and track how we’re doing.
- We monitor all our processes and systems, not just the operational production processes: our planning, human resources, finance, management, marketing, sales and customer service.
- We measure and track the quality of the outputs of our production processes in terms of unit costs, errors and defects rate, throughput, production utilisation.
- We also measure and track the quality of our products and services by the way customers perceive them, to ensure ongoing customer loyalty and sales.
- We have a systematic focus on continuous improvement (eg LEAN), and hold regular review meetings.
- We benchmark our systems against best practice.