Whatever you focus on changes...
I've mentioned this principle before but I was inspired by a recent bit of news from a company I admire. More about them below...but first a quick story from my own experience which was real eye-opener for me and a super-simple, low-tech procedure to implement.
A few short years ago I was struggling with understanding where my cash was going. Without knowing this I didn't have any real idea how to budget, what to save, and what to spend. I also didn't know how my business was really doing in supporting my (modest) lifestyle.
The first thing I needed to do was get an eye on expenses. For me that was easier said than done and I recall trying the following things...
Saving up receipts and then entering them into a spreadsheet at the end of the day...didn't really work as some transactions didn't give receipts and receipts can easily (with me) get lost and at the end of the day - when I was supposed to be relaxing or eating (or both) - I needed to be more disciplined than ever in getting the receipts out or trying to remember what I'd spent. Nope.
Entering transactions as they occured on my phone as each payment was made. "Clunky"! Getting the phone out, unlocking it, opening the app I needed, then typing in the expense I found too cumbersome. Nope.
What I found worked very well for me was a small notebook that would go in my pocket. And I wrote down everything. Every cup of coffee, every road toll, every carpark fee. This was tough at first but I got used to the rhythm. Yes it still needed tallying up regularly but at least I captured all the transactions accurately.
The results were - like many things we've not measured before - eye-opening (such as the amount of money I spent on coffee...). But the exercise allowed me to have a good estimate of the monthly 'burn rate' of cash, whether my business was healthy and what I could do to make some changes.
Measure, measure, measure...
The very act of measuring something teaches us and changes the way we behave. In my example, whenever I thought of going into a cafe, I knew I'd be writing down the expense in the notebook, and that had an effect on my behaviour - it has to.
Broadly though if you want to improve anything, you must measure it first to understand how "it" is behaving currently not how you think it's behaving, make some changes and then see if it's behaves differently.
You must measure something frequently enough to help you make any changes necessary to get back on track. Measuring my expenditure every six months would not have helped me much!
For measurements to work they need to be visible to everyone who's even remotely connected to them. If you have to fish around to find out how you're doing it won't work. Hint just look at the scoreboard in a sports stadium!
Back to the story I mentioned above...
Red Balloon is an Australian company that sells experiences. In 2005, founder Naomi Simson, set a goal to sell 2 million experiences (10% of Australia’s population) by 2015. Equally important, she put up a big scoreboard and tracked it in real time.
Results? Her team achieved the goal two years early in 2013! Her latest goal is based around “velocity of experiences served” with the goal being 1 per second! They are currently at 1 per 49 seconds.
All entities from businesses, sports teams, orchestras, families, charities have metrics somewhere that can improve the way they function.
Look for the simple solution. A higher tech' one may be appropriate later, but do whatever you can to get some numbers first. A simply notebook might be a good start!
My very best and keep Scaling.
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