Business Health: Do Your Reports Say It All?

It’s no secret that the health of a business is based on revenues and expenses, as well as employee productivity and client behaviors. By assessing the sales and cost of goods sold (COGS) with additional details about the sellers (producers) and buyers, you gain a nuanced pictured of both the productivity and profits of the organization and all the people within it. 

Facts don’t lie – reports don’t lie, right?

Maybe...indeed, numbers don’t lie, but the choice of which numbers to pay attention to and how the data is acquired actually can be quite subjective. Working with one organization in which monthly reports monitored gross revenues, we were watching for productivity trends in the various revenue centers. But, something wasn’t making sense. Revenues were inconsistent with known productivity swings of the months in question. Finally, deeper research revealed that, depending on the month, the reports were actually being pulled from two different search pathways – one included accounts receivables, one did not. What seemed like an innocuous nuance to get monthly totals had gone dreadfully awry. It was a simple fix, but completely skewed the results. 

Wait – there’s more...

I just stated that numbers don’t lie. Indeed, this may be true, but in reality, numbers don’t tell the whole story either. Consider, for instance, a highly productive sales team member that we’ll name Jess. Jess usually closes about 127 services packages per month, which roughly approaches the company's average. The company launches a new $1000 bonus program to be awarded to the top individual in the sales group. Completely driven by this incentive, Jess takes more calls, follows up with other leads and beats out his team by an additional 27%. Over the next nine months, Jess’s numbers continue to climb, bringing this former average employee up to the single fastest growing employee production.  

The numbers in this scenario demonstrate the high margins for this top producer. When we respond only to the numbers here, we may find that the incentive is indeed creating the result of higher sales. What we are missing is the undercurrent of dissention amongst the other team members, frustrated by Jess’s persistent, and less-than-collegial tactics. Human resources had to replacing three key employees within two months and management was struggling to motivate the rest of the team, now completely demoralized by the cut-throat tactics Jess was using. Looking solely at gross revenues is a complete cover-up to the actual health – or, in this case, rather failing health of the department. Jess’s jump in sales came with a price – the destruction of the rest of the team’s spirit.  In turn, this would result in long-term repercussions to the company’s detriment and massive loss in gross sales.

Use reports wisely:

1.    Define a list of reports to run on a regular basis.

2.    Go beyond the standard revenue/expense. Monitor other aspects that may indirectly impact your revenue centers or client experiences.

3.    Set up clear, step-by-step protocols on pulling every data point.

4.    Know what you are going to do with your reports – what happens if you don’t hit your benchmarks, and, what will you do when you do. 

5.    Look! Listen! And Feel! Go beyond the numbers and collect the intangible feedback from your team and your customers. 

#businessdevelopment #success #enterprise #revenues #salestraining #management #humanresources #leadership

TEDx Speaker and hand-selected in 2018 as one of Denver’s Top Business Consultants, Dr. Ingrid Pyka is a veterinarian grown into executive strategist. Ingrid implements innovative marketing techniques and inspires organizations with sustainable revenue and growth strategies. It is her passion to empower business teams and entrepreneurs to fulfill their visions and succeed. She especially loves to work with authors, helping them share their story with the people that need to hear it. Ingrid is herself a seven-time winning fiction and non-fiction publisher and author, and, with her positive contributions to multi-million dollar corporations and non-profits, she has also been recognized with multiple distinguished awards as international consultant, coach and speaker.