Don't Our Businesses Deserve Better Than Guessing?

What if you didn’t have to guess?

This is a direct, dead-on excerpted copy from Lee Rosen's blog today. It resonates with me so much that I need to share it with you. You have to get on Lee's mailing list to receive this - there is no link to this material. If you're in professional services lawyer or not, I cannot recommend Lee's material highly enough.

You can sign up for his email list here, https://roseninstitute.com/the-friday-file-is-moving-to-your-inbox/

Also, check out the Rosen Institute Podcast. It's not just good, it's great.

"What if you didn’t have to guess?

And here’s Rule Number Eight: make metrics-based decisions.

It’s a simple rule, which translates into this:

- stop relying on gut reactions

- stop doing what you guess might work

- stop pulling decisions out of your ass

- start using the numbers to make decisions based on evidence

This is both my favorite rule and my least-favorite rule.

I like it because it's so incredibly logical and orderly. I hate it because it involves numbers and math.

You have to make decisions based on evidence and data. You should not make decisions based on gut instinct.

You guess, because you have no useable data

Most of us want to make numbers-based decisions. But we almost never have data that we can use to make those decisions. Lacking data, we use what we’ve got—emotions. We guess based on what feels right.

If you don’t have data, you can’t make metrics-based decisions.

Why don’t we have data for decision-making?

Two reasons:

1. Many of us don’t collect the information and send it to a bookkeeper. We’re behind on gathering the information, and some of us don’t even know what to send.

2. When we do send the information, we get back reports that we don’t know how to read, with information that’s irrelevant to running our law firms, even if we could decipher it.

Why does your bookkeeper send you nonsense numbers?

Many of us get an income statement and a balance sheet from our bookkeeper each month.

We quickly realize that these reports are important for filing tax returns, but they’re pretty useless when it comes to making management decisions.

The reports we get are a snapshot. They fail to reveal trends. They have a limited scope and don’t provide insights. The reports we’re getting don’t help us to run the law firm, so we quickly stop studying them and file them away for tax time.

You need a decision-making dashboard that you can scan—something like what you have in your car. You need to be able to take a quick glance at it, and decide whether to put your foot on the law firm’s gas pedal or brake pedal.

A scannable dashboard lets you go faster

Here’s a sample dashboard (download it). Take a look at it. It’s basic, it’s simple, and it’s a long way from being what you’ll eventually want, as you master your data. https://roseninstitute.com/wp-content/uploads/programs/financial-dashboard.pdf?vgo_ee=oJUo5C1Xp%2FLtMAqEQy94Yi%2FZD%2BmsUFpJrc5fHf6IoVE%3D

You’ll end up with a fancy online dashboard with charts, graphs, bells, and whistles.

But not for quite a while.

You need to start slowly and ease into the process of turning your numbers into decisions. Build something that fits your law firm and you. Don’t farm this project out and end up with a dashboard designed by someone who builds something perfect—for them. You need a dashboard that’s perfect—for you.

Turning data into useful information takes attention, patience, and time. The time you invest now builds the dashboard you can scan quickly—later. It needs to work for your brain, your style, and your approach to business. Create, deliberate, revise: get the dashboard right.

Your dashboard needs to click in your head.

I’m sure you’ve rented a car and found that the dashboard seems cluttered, or you have to search for the gas tank indicator. Then, in your next rental car, the dashboard is intuitive—it just works for your brain. Everything about that car works. You understand the information you’re getting, and you understand the controls that you can use to change your situation.

Your dashboard saves you time and makes you money

You need to create a dashboard that actually works for you.

When you start getting information, understanding it, absorbing it, everything changes. Suddenly you use data for decision-making. That’s how you make better decisions.

You look at the data and say:

"Our new client intakes are down"

"The ROI on our search engine optimization is sputtering"

"Our intake people are letting calls go to voicemail"

"Our online reviews are drifting in the wrong direction"

"We’re billing fewer hours"

Do you have anything you can look at right this moment that would give you a data-based assessment of items like those I just listed?

Again, we’re not talking about how you think the new client numbers are, or how many hours you think you’re billing compared to last year. We’re talking about what they really are.

Most of us can’t draw those conclusions based on the information we’re getting now. It’s time for a change.

No more shrugging—your dashboard delivers

When the dashboard highlights a problem, you need to be able to drill down and find the source of the problem. The information you discover needs to lead to solutions. You’re looking for data to drive your decision-making.

Sometimes the answers to your questions will be simple and clear. For example, the intake conversion rate is down because you have too few people handling the calls, and they’re rushed. That’s a good problem to have and you can fix it.

Other times the dashboard will lead you down a path that requires further answers. You might need more data or might need to run an experiment. Either way, you’re on your way to a data-based decision that solves the problem. You’re not making decisions in a panic hoping that whatever you try will solve a problem that you can’t clearly identify.

Your dashboard will quickly become an indicator that you can use to decide what actions to take and what actions not to take. Until you have that, it's very difficult to accurately and empirically drive your business forward.

You can't make good decisions without the metrics. That's why you need to follow Rule Number Eight: metrics-based decision-making.

Lee"

If you are an attorney who wants help with setting up KPIs and metrics, contact him. He only works with attorneys (I know - he wouldn't even let me take his class). If you're not an attorney, contact me! :)