Scoreboard - Financial Results
Rory Sheppard
Generational Transition | Nonprofit Impact Acceleration | Success Happens When You Create Simple, Sensible Systems that Drive Consistent and Repeatable Results
Many of us love sports or other types of competition. We identify as fans and enjoy tracking our favorite players and teams, gauging the results, celebrating wins, and suffering through losses.?
For winning, our goals can vary.??They might be to:
But, in every case, the participants can see where they are compared to the competition (scoreboard, scorecard, leader board, three seconds behind, and so on).
In business, the scoreboard is ultimately our financial results. Yes, we have other tasks to do and non-financial goals for our businesses, including things such as:
However, these are truly important only if we can stay in business–financial results matter!
Financial results
Just as in sports, the score on the scoreboard mirrors the cumulative impact of effort. Your top-line sales, margins, and bottom-line profits reflect the actions of your team. Your competition is the results of the previous day, week, month, or year. Are you getting better? Are you incrementally improving? Can you see the impact of those improvements in your results?
While the final score is how we judge our performance, we can’t simply declare, “I want more top-line sales,” and it magically happens. We must work on one or more of the following fundamental factors that drive sales:
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At least one of these needs to increase (while the other two stay constant or also increase) to drive the desired results.
Key Performance Indicators (KPIs)
Sports are such a great analogy! Our teams, just like the players on a football field, need to know the elements (measured by KPIs) that influence the outcome and increase our chances to put more points on the scoreboard, such as the following:
KPIs in business are analogous to the detailed stats in sports. They show progress, indicators that you are progressing toward the goals of financial results. For example, consider the following sports KPIs and possible corresponding business KPIs:
The list could go on, but I think you get the picture.?
We all want to be on or at least associated with a winning team. Our team members need to know what they can do to improve those chances individually, and we need to provide the training, encouragement, and practice opportunities to ensure their success. Our results depend on it!
"Only?Action?gets you closer to your dreams - do something today that your future self will thank you for."
- COACH?
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H-E-B, L.P (Semi-Retired)
3 年Hello Rory... I was attracted to your posts because of your sports analogies. I think some business concepts can be more easily explained using these analogies. One item I did not see in your post on ways to increase sales is to focus on increasing the amount of items that you sell. You stated increasing customer count, average item price, and transaction count. Considering the inflationary period we are experiencing now, average item price is already increasing due to inflation. As a result of this, total sales may be showing an YOY increase, but is it a true measure of a business increasing their sales? I think not. I am of the belief that a true measure of increasing sales is to get your customer to buy 1 or 2 extra items per shopping trip. For example, if a category, such as cereal, is showing a $ sales increase but the units sold in the cereal category are showing a unit decrease, then I do not believe sales are truly growing. Example: Sales $ showing an increase of 5%. Units are showing a decrease of 7%. Inflation in that category trending at 6%.The unit decrease is actually 8% when inflation is factored in. Customers are buying less cereal units, but it may not be recognized because sales are show positive growth. I know this is a mouthful, but my hope is that you see the value in selling more units as a means of offsetting the effects of inflation on retail categories. Thank you... Eli Harden
From Inconsistent Profits to Sustainable Growth: Helping Business Owners Achieve Financial Freedom & Peak Performance With Proven Systems
3 年Outstanding post Rory - your analogies from the sports world are spot on. As a basketball coach for many years our winning ways started with the stats sheets. The old steal to turnover ratio was a critical driver to winning games - and my guards were well aware of the KPI! Thanks for sharing Rory