If You’re Not Tracking, You’re Not Growing.
Last week, Hockeystick led a workshop for Futurpreneur Canada’s 2016 Spin Master Innovation Fund cohort. It focused on how early-stage companies can use performance metrics to drive their businesses forward.
Here are key takeaways from the session, which was led by Hockeystick’s Founder and CEO Raymond Luk.
Tracking and analyzing performance metrics should be a key component of every company’s growth strategy. While some small businesses can run smoothly without much formal measurement, for growing startups the control of this process is indispensable.
Mapping out Measurements
One of the challenges with tracking metrics at the early-stage is figuring out what needs to be measured to drive a business forward. To do this, it’s important to focus on quantifiable factors that are linked to the drivers of success in your business and sector.
Here’s an example.
If your business thrives or nosedives on the quality of its customer service, then that's something you need to measure—through, for instance, the number of complaints received.
Takeaway—Performance data can become a powerful management tool if you focus on areas that determine your overall business success.
Remember, this will vary from sector to sector and from business to business. So put some time into learning what drives success for a business like yours and recognizing what’s important to you.
Setting Sufficient Targets
Once you've started measuring those key areas, the natural next step is to start setting performance targets. Doing this will give your team a clear understanding of what they should be aiming for.
Strategic visions can be challenging to communicate, but by breaking down top level objectives into smaller specific targets will make it easier to manage the process of delivering them. Hockeystick did this by having each of its departments create their own operational dashboards.
In this way, targets form a critical link between strategy and day-to-day operations.
Takeaway—Hitting growth targets is unlikely to be a cost-free process, so be ready to make the necessary expenses in order to grow.
Measuring up Against Other Businesses
Benchmarking is a valuable way of improving your understanding of your business performance and potential by making comparisons with other companies.
It’s useful to compare yourself against businesses in the same sector. Keep in mind that your market position and objectives will affect the specific comparisons you want to make.
Takeaway—The same rule applies to benchmarking as to deciding which performance metrics to track. Focus on factors that drive business success in your sector.
As your business grows, you can also benchmark in-house. Consider this, comparing turnover rates between departments can allow you to spread good practices from the best-performing areas of your business.
Considering the Unknown
When you start tracking, it’s important that you dig into the data and look for meaningful patterns and opportunities. Those metrics are called the “unknown unknowns” and are incredibly valuable to companies, as they can help discover something new that will help businesses grow.
For example, if your early-stage company relies heavily on user engagement, doing some exploratory analysis to discover what top users have in common, will let you find the right market for your offering.
Takeaway—Learning the “unknown unknowns” will take time, but will eventually allow you to refine your niche and better target your market.
In the up and down world of starting a new business, tracking key performance metrics will help you make informed predictions, ensure you’re moving forward and avoid the type of surprises that startups just don’t recover from.