I want you to cast your mind back to January and picture the scene.
It’s bitterly cold outside. I live on the Cornish coast and there’s a cold wind whipping in off the Atlantic bringing freezing, stinging rain with it. Going outside in this weather is far from appealing.
But I’m in my third week of a ‘Couch to 5km’ running programme and I know braving the elements will take me a step closer to my goal. Sometimes there are things we have to do out of necessity rather than enjoyment.
So off I go, out into the elements, one foot in the front of the other. Before long (and after seriously contemplating my life choices) I start to enjoy the run and my thoughts quickly turn to how beneficial this programme is.
See, if I’d simply tried to run 5km from the outset, I wouldn’t have made it. I would probably have made it part-way, run out of steam and given up, disheartened. Yet, by breaking it down into manageable chunks, having patience, and working towards a target and goal, I know I stand a far better chance of achieving what I want to.
The parallels with running and running a business are striking.
Setting goals, targets, and KPIs without any plan in place on how to reach them is a great way of going nowhere fast – in running and in business.
Optimising business performance is nothing new but I still find it’s something people play lip-service to without really thinking about.
Let’s go back to running and sport. The wearable tech market has exploded in the past couple of years. An increasing number of devices are now used to track everything from advanced heart rate metrics, sleep stages, recovery, effort expended, stress and more besides.
This has led to a growing number of users using their biometric data to ‘hack’ their performance. Take WHOOP, the wearable strap that promises to ‘unlock human potential.’ Through its app, WHOOP gives its members a breakdown of how different factors influence their recovery and performance. The granularity of the data is astounding. Users will get messages like: “Your recovery is 10% less when you eat a meal after 8pm” or “Caffeine intake after 5pm reduces your time spent in deep sleep by 25%.”
When users are given this level of data – and the recommendations that come with them – they are able to change their actions and behaviours accordingly.
The exact same is true for businesses and is why visibility of the data that’s most important to you is crucial to unlocking better performance.
This data is going to differ on a case by case basis but, as a starting point, you should look at elements like the performance of your marketing channels, income to salary ratios, margins and profitability, cost centres, average purchase value and customer lifetime value.
Once you’ve got an overview of your data you can then see how you’re performing, identify performance factors and react accordingly to optimise your business.
Whether this is a new concept for you or something you’re aware of, it can be a huge help to strip everything back to start with.
Here’s the five foundation steps you should put in place:
What metrics matter to your business and what are you going to measure? A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively you’re achieving key business objectives. The starting point is to identify what the most important metrics are you want to measure and track.
Once you’ve defined your KPIs, it becomes much easier to set goals and targets. As with any kind of goal setting, be ambitious but be realistic too. If we go back to the running 5km example, aiming to be able to run 5km without stopping in 9 weeks is achievable. Aiming to do it in sub-25 minutes is probably less achievable! You can always use stretch targets as an extra incentive for your team.
With your KPIs and goals in place you now need a plan on how to achieve them. Good plans are your blueprint for achieving your goals. They should be robust while being flexible enough to adapt to changing circumstances. You can read more about planning and strategy here.
As mentioned earlier, you need to track and measure your data in order to spot trends and get better visibility of business performance. Put simply, the more data you track – and the longer you track it for – the more quality insights you’ll get into how your business performs.
Data on its own is useful but it shouldn’t end there. By analysing your data, spotting trends, and identifying what factors have the biggest impact on performance, you’ll be able to then act on what you see. This data helps you make better decisions and, as a result, your business will perform stronger than it ever has before.
We love data and we usually talk about how important it is for sending successful email marketing campaigns. But the importance of data doesn’t stop there. By diving into your own data you can unlock the key to better performance and take your business to the next level.