I read an article this morning on Rental Equipment Register entitled “The Numbers Behind The Numbers” in which the author suggested there are certain measures and operational metrics that any rental equipment house should be tracking. To name a few: total annual revenue per employee, staffing relative to rental volume, fleet financial utilization , EBITDA, and so on. While I’ve been in and around the rental industry for over two decades, my time has been more on the marketing and sales side so I can’t speak to the validity of his recommendations (although they seem well founded). What I can attest to is his message of the importance of effective measurements. Or, as the old saying goes, “what gets measured gets managed.”
Working with different types of companies over the years, this is not an unfamiliar concept. Whether you’re the CEO, middle management or in sales, there are key metrics that speak to the effectiveness of the company and your own efforts as part of it. Most people can rattle-off a list related to financial or operational performance, but when you ask them how frequently they check these vital stats and how easy it is to do, there’s often a sigh or eye-roll involved.
Data Is Only As Useful As It Is Accessible
The vast majority of us aren’t experts when it comes to mining data and extrapolating it into a form that’s concise and actionable. Often this challenge is a function of where/how the data is stored (ERP, CRM, spreadsheets, paper files, etc.), but there’s also the facet of tying these disparate sources together if they aren’t already. In the case of the article referenced above, you’d likely have to pull employee information from one source, like an HR system, and rental revenue from somewhere entirely different. How much time will that take?
The good news is: it is possible to do. The better news is: if you can do it effectively, you now have relevant, timely information, which you can use to make better decisions. The key is to start simple.
What are the most important indicators to running your business effectively? Today, there is more data within our reach than ever before. It’s easy to get mired in the enormity of it all. Pick three metrics that you can commit to tracking regularly and you believe are critical to understanding how your business is doing.
Develop a discipline to regular review. Research shows it takes 21 day to form a habit. Considering the three metrics you’ve selected, how often does it make sense to review them? Daily, weekly, monthly? Once you decide, add it to your schedule. Be sure to include enough time to both access the metrics, but also analyze them.
Share your metrics. If your three metrics are important to you, they’re probably important to others as well. Make them part of regular meetings with your team or send a updates to others. Not only will this help spread insights and inform others, it also helps with your motivation to step two.
Take action. If you aren’t learning from your metrics and applying them to make your business or yourself more successful, you’re either tracking the wrong metrics or you’ve lost sight of why you’re tracking them in the first place.
Add To Your Favorites. There are no doubt dozens, if not hundreds of metrics that could be good indicators in your specific space. Consider which are most beneficial and how they play into your portfolio of numbers to watch. You may even find over time that some become less important so adjust accordingly.
Evolution Over Perfection
George S. Patton was famously quoted for saying a good plan executed today is better than a perfect one executed next week, or words to that effect. I think this is especially applicable when it comes to building a discipline around reporting.
Foundry26 has developed many dashboards and visualizations to help companies stay on top of measurements that are core to their success. From sales rep scorecards to service KPI dashboards, we utilize various methodologies and technology to put this information at your fingertips in a manner that’s easy to consume and act on. Contact us if we can help you do the same.