What’s your goal?
How can you measure progress towards meeting your goal?
These are practical questions – not only does every business person need goals, but they also need to measure progress.
I’ll give you a simple example. I’m blogging. My current goal is to get people to read my blog. I measure my performance by the number of “hits” I have every day. Here are my latest stats, by day:
Here are my hits by week:
The number of hits give me a feedback about how many readers access these posts.
“Hits” is called a feedback measure of readership. It indicates how many people have read my blog in the past. Better would be a predictive measure of readership, which would indicate how many people will read my blog in the future.
Another measure of performance I use is the number of posts. This is more predictive than hits – the theory says that the more content I write, the more hits I’ll get. I try to post something every weekday. As of today I have written 157 posts.
Strategically, it helps to identify and measure factors that will drive future hits. For a blogger, these could be:
- guest posts on other blogs.
- external links to the blog site.
- rank in a Google search.
Some of these metrics should be based on accounting, though most accounting metrics will be feedback, rather than predictive. In other words, accounting measures (such as sales or net income) indicate your performance in the past rather than future performance.
So far, as a blogger, my sales and net income are pretty much zero. Not much to keep track of here, at least not yet.
But this post isn’t only about blogging. It’s about how to measure your performance to reach specific goals.
A dentist-friend of mine, Dr. Alex Gildin, started up a dentistry practice last year, Pleasant Dental. Dr. Gildin counts new patients, and can rattle off the total number of new patients he has brought in, and the number of new patients added each month. This performance measure is predictive because new dental patients will ultimately increase sales.
Ideally, a business should keep a dashboard of four or five different measures that are periodically updated and reviewed. Don’t just use standard measures (like revenues). Think about specific measures that will work best for your business.
[Image: Measuring West by stevenharris, on Flickr]