We all like to wake up to a fresh newspaper in the morning. Pour a cup of coffee, unfold that paper, and dive into the latest headlines. Imagine instead you get to read the Daily Numbers for your company – all the key metrics and drivers of success for your business. Sounds exciting, and it is.
Many companies use dashboards to report their daily numbers. These can be visual representations of the data – things like graphs and charts, with pretty colors so they are pleasing to the brain. Some dashboards even look like the instrument panel on your car, so they are familiar and inviting.
The problem some companies run into is figuring out which numbers are most important – what to include, what to exclude. Instead of limiting the information to the most critical numbers they include every number possible. Imagine the dashboard in the cockpit of a 747.
These days we have so much information that we stuff ourselves with data. We run so many reports the numbers start to blend together, we feel overwhelmed, and lose sight of what information is truly important.
Just because we have access to certain data, doesn’t mean we should bury ourselves in it.
The Daily Numbers should serve as need to know, results oriented information. You identify the result you want to achieve and use the Numbers to monitor the results you’re getting every day. The Daily Numbers measure things that matter, drive action and make a difference in your business.
How do you identify what to include in your Daily Numbers?
Think about the dashboard on your car, there are two things that are most important – the speed, and the fuel gauge. You need to know how fast you’re going, and you don’t want to run out of fuel. Other instruments on the car dashboard like the the fuel economy, battery level, or that hot / cold gauge are not critical information. These are the nice to know things. Although, no one really knows what that hot/cold gauge does anyway.
To identify your daily numbers, ask yourself: What is the most important information about my business that I need to look at first thing every morning? Like the two instruments on your car, what are your gauges that need to be monitored every day?
The 80/20 rule, the law of the vital few, will be your guiding principle when answering this question. The 80/20 rule states that 80% of results, come from 20% of causes. What results do you want to achieve? These can help you form the information to include in your daily numbers.
As an example, in our company we were were carrying too much inventory. Sound familiar? High inventory was eating up cash flow and leading to out of code product. We included in our daily numbers a snapshot of inventory value for each of our warehouse locations along with a days on hand calculation. Our goal, the result we wanted, was to have less than 25 days of inventory on hand.
Seeing the number every day kept it front of mind and top priority for our team. It allowed us to continue to work the problem and identify the cause of the high inventory and implement solutions.
Use 80/20 thinking, identify the results you want and setup your Daily Numbers to measure the results that matter. This small, simple step can make a big difference in your business and your financial performance.