A quote by Albert Einstein should appear on the welcome screen of every Venture Capitalist's Blackberry and it is is this - 'Not everything that can be counted counts, and not everything that counts can be counted '
There is a dangerous obsession in analysing spread sheet data to the point when a business loses its soul and starts to show 'metric flu' symptoms.
And those symptoms manifest themselves if the worst way possible, where CEO's and the companies they head are slammed for getting their numbers wrong.
The biggest cardinal sin that a company can commit is to miss its numbers. Or that is how the analysts and economists would have you believe. Business is obsessed with control and quantification of the slightest 'blip' in a revenue forecast.
As an Entrepreneur I believe in 3 numbers only. I make no apologies for the simplicity of this conviction.
1.What our customers think of us . And not through a survey, my measurement is based on their repeated spend, the percentage of customers that are still customers, and finally and most importantly the percentage of customers that I have personally met or communicated with.
2.Turnover of employees. Critical, high turnover means either there is something seriously screwed in your hiring process, or there is something badly wrong with morale. Either way consistently measure, very few do.
3. Sales numbers. Not the top line revenue, that can often prove to be meaningless.You should look for the underlying numbers behind your sales results. For example number of new and existing customers measured against relevant periods, the number of web site hits, sales calls, marketing campaigns it took to win new revenue. A question I ask myself daily is how many dollars per customer did it cost us to secure one customer?
In the new age of innovation change is constant and you have to make decisions rapidly. Make those decisions knowing what makes anyone, whether customer, employee or partner buy from from you.
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