SMB Leaders Failing to Identify and Track Key Metrics, Stunting Business Growth
According to a survey commissioned by Geckoboard, 1 in 10 SMBs have no growth targets and only 1 out of 10 SMBs that do have growth targets, track them in real-time
Geckoboard, the live TV dashboard application, today released key findings from their 2016 Small and Medium Business (SMB) Growth and Metrics Survey. According to the survey of more than 250 small and medium business owners in the U.S., one in 10 companies failed to identify any growth targets for the year ahead. Without setting targets and monitoring key performance indicators (KPIs) on a regular basis, a vast majority (77 percent) of these businesses remained small in scale, reporting less than $100K in revenue annually.
“There are so many things that are outside of an entrepreneur’s control, but establishing and tracking key company goals is not one of them. Businesses that don’t learn to follow suit are limiting their chances of growth before they even get properly started”
The Value of Real-Time KPI Monitoring
According to Geckoboard, setting and tracking KPIs, the critical metrics that contribute to a business’ growth, is an important step to success, as both employees and companies perform better when clear goals have been established and monitored.
Tracking data consistently has significant benefits to a company’s bottom line, as those that monitored in real-time were twice as likely to meet all of their growth goals, compared to the rest of the survey participants. Of those businesses that track in real-time, 50 percent met all of their goals in the last 12 months and 92 percent met all or some of their goals compared to those who don’t track in real-time, who reported a success rate of 24 percent and 64 percent respectively. However, the overwhelming majority of respondents (70 percent) stated that they don’t have insight into their company’s performance on a daily basis. In fact, only 14 percent of businesses reported that they monitor their important metrics in real-time but less than nine percent of business leaders say they look at their company’s data in real-time.
Younger Leaders Value Data-Driven Decision Making More
Survey findings also indicate that the younger generation of business leaders is more inclined to define and monitor key metrics. Of the leaders who track their metrics in real-time, 33 percent were under 35 years old and 58 percent were under 45, with only 13 percent of leaders 55 or older tracking data in real-time.
“With so much data available, business leaders don’t know where to start with tracking it in a meaningful way,” said Geckoboard CEO and Co-founder Paul Joyce. “Most companies aren’t defining their most important metrics and even if they are, they’re not monitoring them in real-time. However, the data clearly shows that companies who measure and monitor their performance against goals can improve performance and grow more quickly. Sharing key metrics in real-time with all employees ensures everyone is focused on working towards the same goals.”
Employees Perform Better When They Understand Critical Business Success Factors
While tracking metrics is crucial, it is not enough on its own. Business leaders must also make that information available to the entire team to motivate them towards achieving goals. According to the survey, six percent of companies never share KPIs with their employees, despite citing that the most important factor contributing to business growth is every team member having clear objectives and the number two most important factor as every employee being aware of the key metrics which help the company grow. Companies that don’t share their data tended to have older leaders (80 percent had leaders that were 45 years or older) and tended to represent smaller companies (100 percent had less than 100 employees and 66 percent had less than one million dollars in revenue). Younger leaders were much more open to transparency in sharing company performance.
“There are so many things that are outside of an entrepreneur’s control, but establishing and tracking key company goals is not one of them. Businesses that don’t learn to follow suit are limiting their chances of growth before they even get properly started,” Joyce concluded. “Solutions like Geckoboard help build goal-focused teams. When leaders and employees have constant access to evaluate performance against key goals, they can make the necessary moves to immediately impact their company’s performance. The longer companies wait to define goals and key metrics and then make performance data against them accessible, the less likely their teams will change the outcomes for the business.”
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