What is Your Number?
By Phil Elworth
Recently, while reading the book “Traction” by Gino Wickman, I came across the story Gino had retold of Charles Schwab, who ran the Bethlehem Steel Company in the early 1900’s. In the story Charles was speaking with a plant manager about the low level of performance in his plant, and how the employee, as a very capable plant manager, did not know how to increase the production. It is said that Charles stopped one of the workman coming off the shift and asked him how many batches of refined steel they had produced that shift. He received the answer of 6. Mr. Schwab then took a piece of chalk and wrote the number “6” on the floor and walked away.
When the second shift came on duty they asked what the six written on the floor meant and were told that this was the number of batches the day shift had produced. The next morning when Mr. Schwab returned to the plant the six was replaced with the number “7”. When the day shift arrived they too saw the 7 and proceeded to produce 10 batches that day. Soon the plant moved from being a subpar producer to one of the most productive plants in the company.
So I will ask again, what is your number? This story, which was originally written by Dale Carnegie in his book “How to Win Friends & Influence People” shows very clearly the power of having the metrics that help you cut through the complexity of managing a business and give you clear indications that you are on target or not.
Every business should understand the drivers that help them generate sales; generate a profit or move the business forward. When you know what these drivers are, then you need to identify the key metrics that help you know just how you are doing.
Let me give you a page from my own playbook. As a partner with B2B CFO® I provide a level of service for business owners, helping them understand, manage or grow their business. As such, I have a personal goal of how much revenue I wish to achieve in a given year. I even break this revenue down into a weekly basis. However knowing where I stand in my weekly revenue does not help me understand why I am short in reaching the goal.
I need a better number. In my business I know that a business owner will not talk to anyone about their business. This is personal and confidential. Therefore, I need to be introduced to a business owner through a warm introduction. Someone the owner knows and trusts. Knowing this “driver” however, still does not get me in front of a business owner.
To get in front of a business owner I need to meet with these other trusted advisors, who are also in a position to know the concerns of the owner with their business. To accomplish this, I have set the goal to “touch” 50 people a week. A touch can be a presentation, a phone call a meeting or by a direct e-mail. From this I seek to meet with 5 people every week. Many of these meetings are with people I have met with before but that I need to get to know better in order for me to refer business to them and likewise for them to become comfortable with me. Ultimately I know making these connections will lead to introductions to business owners who may be interested in working with me.
So now, if I look at a weekly revenue number and find myself short, I look at my other numbers and know right away if I am doing the upfront work necessary to achieve the goal. So I will ask you again, WHAT IS YOUR NUMBER? This is one of the services I offer my clients, to help them plan their business and execute on this plan. If you wish to talk more on this subject I can be reached at firstname.lastname@example.org.