There is a common saying that “numbers do not lie”. However, some use numbers to lie. As such, everyone in businesses needs to have an eye for numbers. One must be able to figure out if the numbers add up. Where manipulation of numbers is possible, some control measures are critical. If you are an accountant or in finance maybe you are already thinking of revenues or profits. If you are in sales, you are in charge of bringing in the revenues. It is an easy role to measure someone’s performance. One is either bringing in the numbers or maybe the numbers are not coming through easily. Besides the top line and bottom line, those in business need to pay attention to many other numbers.
If you are involved in measuring financial performance, I am sure, many other numbers are top of the mind. Maybe you are thinking of the efficiency ratios or liquidity ratios. Alternatively, simply at the top of your mind maybe the expenses or the accounts payable or accounts receivables. Maybe you are keener on the numbers relating to interest rates or the rates of taxation or rate of return for the shareholders. Besides the financials, many other numbers are used in the world of business mainly to measure business performance. On the production floor, for example, there are many quantifiable measures. Production volume could be top of mind. Other measures such as machine throughput, labour input, capacity utilization, production downtime point to production efficiency. Tracking of product quality often happens with many different metrics monitored and recorded. Inventory of the raw materials, work in progress and finished products are also tracked. What numbers are you using to keep your production process in check?
In the front end of businesses, many other numbers can help gauge business health. At the service points, for example, queue length, wait times, the number of customers served, time taken to serve each customer speaks volumes. In call centres, call wait time or average speed of answer, average handle time, unanswered calls, and call abandonment rates are key measurements. The number of customers, the rate of customer attrition, customer satisfaction and loyalty levels are vital numbers. Consumer demographics are also tracked to inform marketing decisions. How are you measuring your customer interactions? What numbers are you tracking? What are the numbers saying? Are you using the numbers to make better decisions?
I like to work with numbers. I find them easy to understand. I especially like it when numbers guide our business decisions. These numbers could be from the past, the present or the future. When we need to open a store, a petrol station, or a restaurant in a new location, numbers should guide us. When we need to increase our production or storage capacity, projected future numbers would help us make better decisions. When we increase or decrease the number of service points or the number of contact center agents, it should be based on some numbers. When we restructure the business or the capital structure, numbers guide us. In the world of business, numbers make a big difference, they speak out louder than words!
Dr Lucy Kiruthu is a Management Consultant and Trainer. Connect via Twitter @KiruthuLucy