American Icon: Alan Mulally and the Fight to Save Ford Motor Company
First, I want to recommend that you read this book. It’s one of the best business books I’ve read in years.
Now I want to encourage you to grow your business, no matter how big or small, the way Alan Mulally saved and then grew Ford Motor. After reading the book it became a goal to scale and implement the same concepts in my own businesses. It worked beautifully.
I started by identifying 10 key metrics that are important to my business operations. These were not items I had watched very closely in the past. I decided to monitor things like bounce rate on my websites.
Bounce rate is a measure of website visitors who leave without visiting more than one page of a website. They come into the site, decide it’s not for them, and leave. Obviously a lower bounce rate is better. A good bounce rate for most businesses is around 50%. That means only about half of your site’s visitors leave immediately.
Before you gasp in horror, check you own bounce rate. It could be as high as 90%! If you don’t know how to get your bounce rate, find out. It’s probably your most important statistic.
So I set up an excel file with my 10 measurements. Then I made a task list for the month. There are things to do to improve each metric. I set “due dates” for each task. And I set targets for each metric.
For example, to lower the bounce rate, I set a task to re-write the text of my homepage. If the bounce rate went up, I re-wrote it again. If it went down, good. On to the next task. The following month, I might decide to re-write the page again. (Always improving my 10 metrics)
When a metric is missed, it gets red flagged. That’s a dramatic BIG RED BOX. If it’s just OK, the box is yellow. If I beat target, it’s green.
It set up the same conditional formatting for each task. Late? RED. On Date Due? Yellow. Completed on time? Green.
This was pretty easy to set up. You can do it too.
I wanted noticeable growth this year so I set ambitious targets. 2015 started with a lot of red flags. By mid February I was in yellow territory and my tasks were better focused on the things that improved the metrics I had selected. This in turn improved business. By the first week in March, there was a lot more green. And I mean green.
I have more objectives for this year and there is still a lot of red to turn into green. But the difference to date is amazing.
You can implement a similar program and you will see results quickly.
Select 10 key metrics that, if improved, will yield more sales, reduced costs and higher margins.
You can do this regardless of whether you run a Fortune 100 company or a one person business. You set the metrics, use the color flags and work your plan.
I linked my excel sheet to PowerPoint slides. I can pull up those slides and see some red slides, yellow slides and green slides.
These days I’m seeing a lot more green. So can you. Just work the plan.
Chris Reich, TeachU