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Numbers Don’t Lie
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Numbers Don’t Lie

Numbers Don’t Lie

If you run a public company, you no doubt manage your business by the numbers. You have investors who have given you capital and expect a return on their investment. That is why the quarterly earnings reports are so important to publicly traded companies.

But what if your company is private? What if you are the loan investor of your business? No one is asking for your quarterly earnings. In fact, you are not even required to create a budget.

Numbers don’t lie. You can tell people you are doing great at business, but your numbers tell the real story.

Numbers don’t lie. You can tell people you are doing great at business, but your numbers tell the real story. You are either making a profit or you are not making a profit. You are either growing or you are not growing. How do you know if you are winning or losing at business if you don’t know the score?

I read a great book years ago that took the concept of managing by the numbers to the next level. Jack Stack was a mid-level manager of a steel factory when his American dream became a nightmare. The factory shut down, leaving him and his other managers out of work.

They decided to pull their resources together and buy the plant. But Stack wanted to manage the company differently, so he set out to learn everything about the business. To his surprise, the most efficient person in the company was the janitor. He was always on budget and never ran out of supplies. When Stack inquired, he learned the janitor kept up with all the numbers he needed. He always knew how much toilet paper and paper towels he had on hand and was careful to never order too much.

That gave Jack an idea; what if everyone in the company reported weekly critical numbers to the company? And Stack devised a plan he called “The Great Game of Business.”

We implemented our own version of this concept eight years ago. Today, everyone in our company knows if we made a profit or lost money the previous week. We keep salary information private, but everything else is open to every employee. The concept is to give power to your staff to help you solve the problems.

It is not a perfect system. Sometimes a staff member can become callous to the numbers. But I have found that most feel empowered that the company would trust them with the financial numbers.

Here is the bonus when you manage by the numbers: there are no emotions involved. Each staff member knows what number they are supposed to hit. People want to know what the expectations are and giving them a clear number to hit helps them work toward those goals. And when they don’t hit their numbers on a consistent basis, there are no surprises when you have to release them and move on.

So what are your critical numbers for your business?

Scott Miller is the CEO of Centerpost Media, host of the Create. Build. Manage. show (seen on BizTV, heard on BizTalkRadio, and available wherever you listen to podcasts,) and a member of the Forbes Agency Council, Entrepreneur Leadership Network, and Dallas Business Journal Leadership Trust. You can find Scott on Facebook, Instagram and Twitter via “@scottmillerceo” or on LinkedIn via “@scottmillermedia.” Centerpost Media is a content marketing agency with a vision to help every business they encounter with their media needs by providing outstanding quality, service and value. Centerpost Media is the parent company to BizTV, BizTalkRadio, BizTalkPodcasts and Bizvod.