Rule of Thumb Metrics

It’s amazing how many times people banter around acronyms and jargon: ROI, ROE, EPS, P/E — the list goes on. Well — we will not be talking about any of that, today. Instead, let’s take a lighthearted look at the people and teams around you — the folks who make running a business possible — through easy-to-understand metrics.

In your life, professional and otherwise, you have probably experienced the power of teamwork. One plus one can equal three with the right team, as people pull together to become something greater than the sum of their parts. An important part of teamwork, of accomplishing goals in general, is efficiency. There’s a number of metrics that can help you streamline your team, so let’s start with three of my favorites:

1) Work-to-Mouth Ratio – The first time I heard about this, it was described to me that as long as the work/mouth ratio is greater than one, it’s a relationship worth having. The idea of “work-to-mouth” to is make sure than unnecessary banter and drama are outpaced by positive — and productive — output.

2) Say/Do Ratio – I picked this one up recently, and it’s a very simple concept: how much does the person talk, versus how much do they act? There’s a significant difference between saying and doing, after all, and we’ve all worked with many people that promise the world and just deliver hot air. The say/do ratio should always swing in the direction of doing —  because taking action produces tangible results, while talk is cheap.

3) Addition by Subtraction – Sometimes, it’s hard to make a decision to remove a poor performer from a team. In corporate America, one might be concerned about the difficulty of finding a reliable replacement. In a small business, scarcity of labor might create the same fear — and also comes with the consequences of more pressure should a new hire not work out. What is amazing, however – is the amount of drag an under-performer places on the entire team. You won’t even realize it until the weight has been lifted, but your entire team can really be dragged down by dead weight. When it comes to streamlining, I honestly believe that most people would rather pick up the additional work versus have a person that is not performing — or worse, creating problems for others to clean up. Thus, the concept of addition by subtraction is born! You can add to your team’s efficiency and satisfaction by simply taking away limiting factors.

Think through

What are you “go to” metrics and sayings? Do any of the above resonate with you? If so “own them” and share! Help the next generation of leaders grow and have some fun with these metrics.

I would love to hear the metrics and phrases you use. Feel free to post comments or email them to me. I am always looking to build my portfolio of sayings. Especially ones that are so short, yet say so much! Small Business, Big Lessons™ – Metrics that make business fun!

 

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About the Author:

Gregory Woloszczuk is an entrepreneur and experienced tech executive that helps small business owners grow their top and bottom line. Gregory believes in straight talk and helping others see things they need to see but may not want to with a focus on taking responsibly for one’s own business. He and his wife, Maureen, started GMW Carolina in 2006.

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