Small Biz Owners – Do You Manage Performance or Just Monitor It?

Do you manage performance or just monitor it
You cannot improve something that you don’t measure.” This is the mantra many leadership coaches have preached for number of years, and for the right reason. If you do not know how your business is performing you are practically driving the car without a dashboard. Anything can go wrong along the way and you wouldn’t come to know about it before it’s too late. That is why performance monitoring should be integral to running a business for any leader.

Unfortunately, most leaders stop at monitoring the performance. While it is absolutely necessary to monitor performance of any business what you do afterwards is even more important. The end goal for the leader is not just to watch how the business is doing , but to take appropriate actions based on what you see to do corrections that will make the business better in the future. This feedback loop is what separates good leaders from mediocre ones.

 

Manage vs. Monitor

There is a crucial difference between monitoring performance and managing it. It is akin to the difference between a baby sitter and a parent. A babysitter will monitor the child and ensure that the child, and herself, doesn’t get into trouble when parents return. A parent, however, will go beyond just monitoring and provide valuable lessons to the child based on what they see in his or her behavior. The goals for both the babysitter and the parent are different. The former doesn’t want to get in any trouble, while the parent wants to prepare the child for adulthood in the future.

In small business the same principles apply. As a leader you do want to understand how your business is performing, but you need to take this one step further and devise a plan that will improve the business and ensure future performance indicators will flash all green. Good business leaders accomplish this with two-step approach. They will take tactical, reactive actions necessary to solve specific issues affecting the performance. They will also take a comprehensive approach and develop a strategic plan to position the business for the future by taking proactive actions.

 

Performance Management Framework

To monitor and manage your business effectively a clear performance management framework needs to be in place. Good performance management framework starts by understanding company’s goals and objectives. The next step is to formulate the strategy that will help achieve those goals and come up with a set of performance indicators that will help you monitor the business. These indicators will let you know if you are making progress towards achieving your goals or if any course correction is necessary in your strategy. This feedback loop is what many business leaders are missing from the performance management framework.

Information technology can help you with performance monitoring by automating collection of performance indicators and producing reports that give a bird’s eye view of the business performance.

 

Better Results Next Time

The goal of managing performance is to not only achieve the short term goal of successful project completion, but to also come up with a plan for future projects. Monitoring and maximizing performance of current projects and developing a plan for future business performance is true business management.

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Comments

  1. What you are saying is absolutely correct performance management or evaluation is of utmost importance and to manage it in well organized manner its necessary that you should take assistance from the various management software’s available whether its for employees performance or for appraisal management.

  2. I see this all the time: many business-owners look at their marketing data (or have a system to measure it) but find it difficult to draw conclusions they can act upon — and what’s the use of measuring if it doesn’t drive your decisions?

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  1. BizSugar.com says:

    Small Biz Owners – Do You Manage Performance or Just Monitor It?…

    Just measuring the performance of your business is not sufficient for small business owners. See why you have to manage your business in proactive manner to grow…