Are You Ready to be Quantitative?

I'm in Ireland today in a meeting of a company board of which I'm a member.  The company has had a very good year - a great one, really - based on a lot of hard work and know how on the part of the leaders.  It's been several years in the making and has paid off for them pretty well.   

Now, as their revenue grows substantially, it's time to make the shift toward a more quantitative management environment. 

To me, this means moving in the direction of managing more to factual data to help managers make key decisions.

As one example, think about forecasting sales based on market potential and competition, rather than simply on historical results by salesperson. 

If we see that our total accounts are underpenetrated in one market, can we test how much it costs and how long it takes to acquire  new ones?  If that leads us to needing additional sales people, can we forecast the benchmark for productivity based on past results?

If we see that one sales person does better on a per account basis than others, can we hypothesize why and then test our suppositions to find the facts?  Once we have some idea of the "why," can we replicate this to other territories?

Can we quantify success in terms of calls, visits, customer sizes, and so forth?

Can we produce a market map to track what our customers want, and from whom they are getting it?

Can we, in short, develop knowledge that other competitors do not have to reduce our sales cycle and increase results?

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As another example, can we reduce our costs to the level of best practices in our industry?   If our automated warehousing system is state of the art and provides us a 10% increase in Net Operating Income, what can we do with that money?  Can we keep it to use as a war chest to expand in other areas?  Add another sales capability?  Build our internal capacity to grow? 

If our competitors have already achieved state of the art costs, and we are already at a disadvantage, what can we do about that, if anything?

Also, are we waterfall forecasting  every month to spot trends and react more quickly?

Smart managers who know their business can move closer to major gains in their business goals, whether market share, lower costs, both, or other, with this kind of proprietary knowledge.

Comments

[Franchise Whale]

Great stuff! Thanks for sharing, one fresh
idea and you can change the world, keep
up the great work.