Entrepreneurship and measuring performance

“What gets measured, gets done!”

The principle is simple: If you can quantify something, you can immediately measure whether progress has been made.

We know that entrepreneurs by nature are not the best managers, mainly because they’re ‘action people’ who are driven by getting things done themselves.  So how does measuring things help them?

It’s simple.  For the entrepreneur, a key performance dashboard is the most useful tool that they can implement in their business.

This dashboard provides them with the clarity to prioritise what they deem the most important, and to place specific criteria onto each performance indicator.

For many people, implementing some form of measurement enhances motivation. It also puts in place a very clear and non-debatable expectation from the entrepreneur to his staff.

Traditionally, entrepreneurs are not the best performance managers in the world. They expect everyone to embody their passion, drive and energy, and tend not to enjoy looking over people’s shoulders to make sure they’re doing their best work. The implementation of key performance measurements increases accountability. Either something was done or it wasn’t. Either the standards were met, or they weren’t.

Placing measurement is not just a matter of thumb sucking a whole bunch of figures – it is a diligent and deliberate process through which the right actions are measured, according to the right criteria, at the right time.

Most importantly, know what you want to know before you even think of measuring it. There is a difference between measuring performance and measuring an outcome. Positive performance tends to have a positive impact on the outcome.

There’s a corollary to the saying, and that is: “What gets measured, can be managed!” An effective measurement dashboard makes this a reality for every entrepreneur.