My 10% theory

Friday, October 2, 2009 at 1:00PM
Joey Brannon in Consulting, measure, metrics

I have a theory that goes something like this:

If you start measuring something that you've never measured before you will realize a 10% improvement (or more) during the amount of time it takes you to gather 3 cycles of data. 

Some examples 

1. A medical practice started measuring weekly production and went from an average of $10,000 per day to $12,000+ within three weeks.
2. A restaurant started tracking weekly coupon use as a percentage of covers and went from 5 coupons per 40 covers to 8.5 in three DAYS.
3. A service and repair business started reviewing dispatch and response times and lowered the average time between customer call and service tech arrival from 90 minutes to 75 in three weeks.

There's a saying that what gets measured gets done. The problem is that most people agonize over whether the right things are getting measured and they wind up with measurement paralysis. Start small. Find one or two NON-FINANCIAL numbers in your business and just measure them for a week or three. Don't set goals, don't elaborate expectations or place value judgements on results. Don't force operational changes, but if something obvious comes to your attention go with it. Above all, just measure and let me know how things turn out. I have a hunch I know what is going to happen.

Article originally appeared on Axiom CPA, P.A. (http://www.axiomcpa.com/).