You’re approaching the end of the first month of 2015. How are you doing so far?
What are you measuring this month to give you insight on your business and how you are doing?
You’re not looking at anything yet?
What are you waiting for?
You started 2015 with a bang, and you’ve been working hard on your goals all month. So, how are things going? If you don’t know, we need to take a step back for a minute. I love that you’re setting goals, and I am thrilled you’re committed to executing your plan, BUT, I don’t want you to do a year’s worth of work to find out it didn’t take you where you wanted to go. I want you to have indicators that you’re on the right track.
I’m not a chef, but my mom is really great in the kitchen – amazing. Growing up, I watched her. She never made a meal without tasting it along the way. If she were making chili, she would taste it, then add some ingredients, let it cook some more and taste again. She kept adjusting until it tasted exactly as she wanted it to.
This is what you should be doing in your business (or job or life). You can’t just hope that your efforts are going to yield your desired outcome. You need to take a taste. In business, this is a formative measure or a measure of progress. It gives you an indication of whether your work is leading you to your desired outcome. Some progress measures you may already be looking at might be monthly budgeted vs actual revenue and expenses or cashflow predictions. Both are estimates of where you hope to be by a specific date / time. Your actual numbers in comparison to your predictions give you an indication of whether you are on track. If expenses are higher than projected and revenues are lower than projected, you might need to adjust spending to hit your defined annual goal for margin. Taste. Adjust.
The annual goal is what you measure against in the end. That is a summative measure. That’s after the work is done. To stay with the metaphor, putting the chili on the table and letting others taste it and comment when you are no longer making adjustments is a summative measure or a measure of achievement. In this moment, the process is complete. The question is, “Did we make it to the target? Did we achieve what we set out to achieve?” It’s a yes/no response. Either we did, or we didn’t. There may be lots of reasons (excuses) that explain why we didn’t make it, but that doesn’t matter in achievement. It’s the equivalent of saying, “I ran out of chili powder.” No one cares. Your chili is just not good.
Both measures are important. Both help guide your work. One tells you you’re on the right path (or not). The other tells you whether you’ve arrived at your destination. Progress and achievement – choose both!
Photo credit: Creative Commons – Babi Krishna