The Key Numbers That Truly Drive Your Business
How profitable will your company be next month?
How much will you do in revenue this year?
Do you know what truly drives your business?
Predicting growth is one of the most valuable—and elusive—skills an entrepreneur can possess. The ability to predict growth leads to clearer vision, smarter decision-making, and faster, more effective course-correction when challenges arise.
And it’s easier than you think.
If you want to know what the future holds for your company, you have to figure out how to accurately measure the present. That’s the idea behind the EOS Scorecard, one of the most important tools in the entire Entrepreneurial Operating System®.
But if you really want traction, you need to identify the few (1-3) metrics that actually move the needle in your company. Finding those numbers is a journey.
We spoke with Steve Showalter, CEO at Statlinx, about finding the right metrics for his company. It’s transformed Steve’s ability to predict what happens in his business.
Here’s Steve:
Our journey with metrics has been a process of iterating on what’s important to us.
We used to track common metrics: total revenue (based on # of minutes operators spend on the phone); abandon rate (percentage of calls where the user hangs up before connecting to an operator).
But these numbers didn’t help with prediction. Revenue is a trailing metric—and vanity. Abandon rate relates to our overall quality, but it’s also trailing.
Our old scorecard never inspired me. And it didn’t make me feel like I had my finger on the pulse of the business.
At some point, I was doing a deep dive into labor efficiency, running complicated calculations for each of our employees. Then a lightbulb went off.
I realized that talk time percentage (the number of minutes per hour an operator is engaged on the phone) was a good gauge of labor efficiency AND profitability. Talk time percentage tells us if we’re properly staffed. It’s a leading metric rather than a trailing one. And I can monitor it in real time and quickly address issues that arise.
It’s the single most important number that drives our business.
Our current scorecard is so simple. We’ve got talk time percentage, and we measure abandon rate to track quality. We’re looking to add a sales metric to accelerate growth. But that’s it.
Our current scorecard tells me exactly how the company is performing—without any complex analysis. When the scorecard is green, we hit our targets, and I’m happy.
These key metrics are usually discovered, not designed. It can take some trial and error to find the right ones for your business.
The metric may be something you already measure or something you just monitor in the back of your mind. You’re working a formula, even if you don’t know it yet.
If you’d like help building a better scorecard, contact us to speak with one of our consultants.
