Small Business Tip: We all play differently when measuring our performance
Isn’t it true that people play differently when you keep score? Think of some kind of competition you’ve been involved in recently, or anything you might choose to keep score / track, or choose not to. A sales boost, a softball game, work deadlines, goal setting, any athletic event, etc. You play or act differently when records are kept, don’t you? It seems to be human nature. We all have at least a small amount of competitiveness in us … some of us have a lot of ships!
In business, things are no different. Employees act differently when you measure their performance. If you want to increase productivity, set up measures that drive your employees to perform. And they will!
A business without an accounting system in place is like going and playing t-ball with 5-year-olds where no scores are kept and everyone is a winner (even if the other team actually outscores you by 1,000 races). You can at least wait for the popsickles after the game. On a side note, I’ve always wondered how kids would stand out if they always played this way and never had a reason to perform better.
Anyway, imagining a business run like this t-ball team means DISASTER from the start. Without the proper measurements, how can a company know how well it is performing (if it is even making a profit) and how long it can realistically stay in business? Things would have to change or this business would get out of the game.
Start keeping score and play to win
I am a huge fan of Zig Ziglar, a popular self-improvement guru. It highlights the fact that “we were born to win” … we were all born to win. I think I was born to win. I was born to be a successful entrepreneur and a winner of a father and a spouse. Success itself belongs to you … if you really want it.
It takes a bit of work to keep score. I don’t know if you’ve ever seen what the meticulous work of the “statisticians” entails, but they are in charge of tracking all sorts of things. Watch a professional sports league. They keep statistics on all types of performance (field goal percentage, batting average, percentage of passes completed, shots on target, hits from the fairway, shots landed, etc.) Almost anything you want to know, they track it. Even some of those “far away” stats, like performance during specific types of weather. Why? What is the purpose of such a detailed record?
Well, it is simply for two main reasons. First, to measure success. How else would we know how good Tiger Woods, or Michael Jordan, is if we have no way of comparing his performance to other players? We would only be guessing. The great teams we think of wouldn’t be so great without some benchmark. Without counting, we wouldn’t have those crazy sports fans who take great pleasure in debating the shoe size of their favorite athletes. What a shame that would be!
The second big reason is to improve. I played some basketball in high school. I loved! I think what I liked the most was knowing, not guessing, that he was improving as the season progressed or as time went on. He had undeniable proof that he had improved!
These two reasons are the main reasons to have a good accounting and accountability system for your business. If we are vague and general in running our business, we will be vague and general in our results. I’m not promoting that you start asking your customers for their shoe size or body fat percentage. But, tracking their birthdays, anniversaries since becoming your client, or other important events, wouldn’t be a bad idea.
Be a fan of your team … your business. Get started with scoring, and if you’re already scoring, take a look at your scoring system and see if there are ways to improve. There are many good “statistics” out there. How is yours up to the task?
Remember, “When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates!“(Thomas S Monson)