In many respects, running a business is like playing an intense game of football. You have an ultimate goal – scoring a touchdown, or in business terms, achieving your profit target. But just like in football, you can’t focus only on the end score; you need to know the yards to the next first down, the time left on the clock, and how well each play is executed. To truly excel in business, you need to monitor both your sales funnel metrics and operational metrics regularly. Here’s a playbook to help you execute effectively with a structured, dynamic approach.
Implementing the Playbook
To make this work, real-time feedback is crucial. Just like a football team gets immediate feedback on the last play, your team needs real-time data to improve performance. Ensure data is updated daily – live data is even better. Multiple visual displays around the workplace can help keep everyone informed. Each display should show performance against the Throughput Dollar goal, but also focus on key metrics relevant to that area. For instance, the sales display might show how many new leads still need to be contacted and quote-to-order conversion rate, while the shop display focuses on template-to-install lead time and quality.
Trend analysis is another game-changer. Knowing your goal for showroom traffic is 20 people per day is useful but seeing that you’ve been trending upward from 8 to 12 visits per day is even better. It shows that your new Facebook ad is working! Display how current statistics relate to both recent history and goals to make the data actionable.
Engage the Team
Ask your employees for feedback on how the displays and metrics are helping them. Are they seeing the right metrics? Do they know what to do if the metrics are unsatisfactory? Involving them in the process can do wonders for effectiveness and morale. It also helps to randomly quiz employees on statistics that are relevant to their jobs. If you consistently remember to ‘inspect what you expect’, you will show everyone that these metrics are important.
The Daily Huddle
Start each day with a Morning Stand-Up Meeting. A quick 15-minute meeting with a set agenda to report status on the daily metrics below ensures everyone knows the day’s priorities. Assign tasks to address issues promptly. Remember this is status reporting only. [Problem solving happens in a different venue.]
Sales Funnel Metrics:
- Lead Generation: Count the number of new leads entering your funnel every day. This gives you a pulse on your marketing efforts.
- Website and Social Media Stats: Track daily visits and engagement. Are your online efforts drawing people in?
- Showroom Traffic: Keep tabs on the number of visitors to your showroom. It’s a direct indicator of customer interest as well as how your ads are working.
- Quote Volume: Monitor the number of quotes generated daily. It’s a direct measure of potential future sales.
- Conversion Rate: Track how many leads turn into customers. A high conversion rate indicates a strong sales process.
Operational Metrics:
- Capacity Booking: See how many days of your capacity are already booked. When are your next open dates for Template and Install?
- Buffer Zones: Visually check buffer status three times a day. Quick checks ensure everything is running smoothly.
- Daily $T Score: Review and post the previous day’s Throughput Dollar score. This keeps everyone focused on performance.
- Remakes and Callbacks: Track the number of remakes and callbacks. Reducing these improves efficiency and customer satisfaction. Showing the financial impact of poor quality makes the metrics even more effective.
- Safety score: Tracking safety incidents isn’t sufficient. If you truly want to improve safety for your employees, you should also track near misses. Combine this data with regular safety audits to form the basis for a solid safety culture.
- Quality score: Focusing on remakes is common. Adding the financial impact of quality issues strongly communicates the importance of eliminating them. When calculating the financial impact, don’t forget to include the ‘opportunity cost’ – the money you could have made on another job if you didn’t have to remake this one.
The Weekly Half Time Analysis
Hold Weekly Review Meetings. Review daily $T performance for the month, forecast month-end P&L, and review the key metrics below with your management team. These reviews help you stay on track and make informed decisions. This is also the time to conduct problem solving. As you review trends for your metrics, it will become obvious where you need to focus your process improvement energies.
Sales Funnel Metrics:
Trend all the daily Sales Funnel Metrics: Closely tracking your leading sales indicators of new leads, social media engagement, and showroom traffic will give you an early indicator for Quote Volume. Trending Quote Volume along with Conversion Rate will help you understand if sales are going to increase or decrease soon. This is your early warning system. It’s crucial to take the correct actions early enough to make a difference.
Operational Metrics:
Trend all the daily Operational Metrics: Your Template-Fabricate-Install processes are where you create the value your customers pay you for. Poor performance here can negatively impact sales in the future. Strong performance here helps increase sales.
None of us has unlimited capacity to solve problems. Analyzing the trends for your key operational metrics is the key to knowing which problems need to be addressed now and which can wait a bit. Tracking your Template-to-Install lead time and your quality trends tells you if you truly have control of the primary value-creating processes that make money for the business.
The Monthly Post-Game Review
Gather the management team for a deep dive into business performance. This is where management analyzes the metrics and their trends to determine what’s working and what isn’t. This is the time to craft solutions to the problems documented in the data. Structured game plans for improving critical metrics should be developed. A clear understanding of the business objective along with roles and responsibilities is essential to successfully moving the needle.
Finally, have a Monthly Business Communication Meeting. Update the entire company on the status of key business metrics. Openly discuss the challenges inherent in improving those metrics and listen to everyone’s feedback. Recognize positive behavior reinforces your cultural values. Celebrate victories to keep the energy flowing. Have some fun with this one, too. Hand out awards for ‘best dressed’ or ‘most awesome hat’ or anything else fun you can think of.
The Winning Formula
By following this structured, upbeat approach, you can free up a significant amount of your existing capacity, reduce lead times, and minimize chaos. However, the system alone won’t deliver results – it’s the people who make it work. Ensure your management team is capable and committed, and don’t hesitate to bring in outsiders for fresh perspectives and tools. Remember, a winning team is always looking to improve, adapt, and celebrate its victories. Here’s to your business scoring those touchdowns and celebrating many wins!
This article is a reprint from the July 2024 Slippery Rock Gazette, found here:
In addition to having run a countertop fabrication shop, Ed has also helped many fab shop owners become very successful. He is a seasoned manufacturing manager and coach who has helped hundreds of companies from single person startups to large international corporations. As a former business owner, he understands the responsibility to make payroll while also satisfying customers. Ed can be reached at Ed@FabricatorsCoach.com . If you want help implementing this tool, Schedule a Call with Ed.