You can only control what you measure…

There is a saying that I have often heard “You can’t control what you don’t measure…”, I like to express things in more positive terms so I would prefer to say you can only control what you measure. It would appear that this is an abridged version of a much longer phrase;

“Measurement is the first step that leads to control and eventually to improvement. If you can’t measure something, you can’t understand it. If you can’t understand it, you can’t control it. If you can’t control it, you can’t improve it.” Dr. H. James Harrington

Whether it is in your personal life or your business, there are many examples. For instance, if you are looking to control your weight, how would you do that if you didn’t use your scales? Well, you cannot really can you. Now that prompts me, is the thing you measure the right thing? Take your weight, Can you directly control it? I’d argue not, your weight is the function of two things, your calorie intake and your calorie usage. Therefore, to maintain weight the two need to be roughly in balance; to lose weight you usage must exceed intake. So in reality, to control weight, you must measure and control the intake and usage. By using scales you are measuring an output, but you really need to measure and control and the two ‘inputs’. OK, so how does this apply to your business? Similarly in business, there are a number of parameters that you might wish to measure and control; such as sales, revenue, profit. However, once again these tend to be output parameters of other functions and in this case there is a serial dependancy too. Let’s use profit as an example. In it’s simplest form Profit = Sales Revenue – cost of sales Sales revenue is the product of number of units sold and selling price. Cost of sales is the combination of the sold units’ manufacturing (variable) costs and overhead (fixed) costs of your business. Therefore, to improve your profit you would need to improve your revenue and/or reduce your cost of sales; both of which have dependent variables, that you might consider measureing, controlling and improving to increase your profitability. The questions? What are your targets? Are you measuring your performance against them? Have you identified the parameters that effect that performance? Are you measuring and controlling them?

Written by Rob Cameron

Rob Cameron

Rob Cameron is a Business Coach, passionate about helping business owners to grow and develop their businesses to achieve the lifestyle they desire. Founder & owner of Ignition Coaching.

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