One of the toughest responsibilities of a CEO: is decision-making.
You deal with everything from small, simple decisions (When should I reschedule the meeting?) to huge, stressful decisions (Should I let go of this team member?)
From small choices to life-changing ones… how do you know you’re making decisions the right way?
Many entrepreneurs follow their gut – basing their decisions on their past experiences, knowledge, and emotions.
But in some cases, your gut is intangible. Simply “feeling” that it’s the right thing to do can be highly subjective.
Since one decision can change the direction of your business, you need a better approach to making decisions.
Be sure you’ve set up a system that trusts your intuition but still makes use of data in decision-making for your business.
Set Business Goals that Align with Your Mission & Vision
Aligning business strategy with your vision and mission will help you make them a reality. Plus, once you have a clear understanding of these two, you make better decisions.
For example:
- Among several proposals you get, you only accept those aligned with your vision.
- Are you finding ways to improve customer satisfaction? Always refer back to your company mission statement. Who are your customers and how can you best serve them?
Your vision and mission are more than posters on the wall in a team meeting. Both of them should tell you what to do, and where the business is heading.
Define Measurable Success with Metrics/KPIs
Ever heard of SMART goals?
SMART stands for:
- Specific
- Measurable
- Achievable
- Relevant
- Time-bound
Here’s an example of a goal that is NOT SMART: I want to grow my business.
Sure, most of us want to grow our business, but how do you measure growth?
This is why you should start focusing on the “M” from SMART, and define what measurable success is.
Choose a financial goal you’d like to achieve, a number of people you want to help, or another target number…etc.
Metrics or Key Performance Indicators (KPIs) play a big part in your next move.
For example, you want to build a stronger social media presence. You can identify and track KPIs like:
- Reach
- Engagement
- Traffic
- Lead Generation
There’s a heads up here.
KPIs are not your business goals or targets themselves. Instead, they’re only a measurement of goals and targets.
So if your goal is to generate 500 leads per month, and you’re currently averaging 100 leads, KPIs show you how close or far you are from reaching the goal.
When you’re able to measure your progress towards goals, it allows you to see where you’re going right or wrong. This is the kind of data that will help you make decisions (that reach your goals) faster.
Collect and Track KPIs
From my last example, you know your target and where you stand right now.
It’s not enough to know you need extra 400 leads to hit your KPI target. That’s only half the job!
You need to know HOW and WHEN to track your KPIs.
Knowing what you want to track is important, but now you need to know where to collect the data. What’s your source? If you’re measuring leads, are you pulling those numbers from your email marketing platform? Or tracking them in Google Analytics? Sometimes similar data can be found from multiple sources and you’ll want to pull the data consistently.
Next, use an online tool to store your data and give you a clear overview of your KPIs.
You can start with:
- Google Sheets – This is the easiest way to track your KPIs. It’s free, accessible, and easy to use! Start with a blank sheet, then create columns and charts. Plugin your KPI goals and play around with labels, colors, and text styles to easily track the numbers.
- An advanced KPI dashboard – Using Google Sheets is convenient, but let’s face it. It takes time to input numbers and customizes manually! There are advanced tools that give real-time, interactive data without requiring you to manually pull the numbers anymore.
Once you have a final list of the metrics that impact your business the most, you can start monitoring them.
How often should you track KPIs? It’s up to you and your team. There’s no right or wrong here.
There may be data that you want to review weekly, monthly, or quarterly – depending on the goals you want to achieve.
Analyze the Data and Draw Conclusions
Your KPI sheet or dashboard isn’t just a record of your data.
You also need to analyze the data. It’s about making the most out of what the numbers are showing.
When analyzing KPIs, you want to think about:
- What KPIs are you hitting?
- What KPIs need to be improved?
- How did you manage to hit certain KPIs?
- How does each KPI result affect the business?
Let’s say one of your main KPIs is your number of leads. You currently have 100, which means you need 400 more to hit your goal.
Take some time to reflect. What are the things you did to generate the leads before? Are those strategies still working? How could you improve?
This is where you draw conclusions.
Think about the impact of these numbers – all the good, bad, and in-between.
Make sure you talk about this with your team and let them voice out their thoughts and suggestions. This is where you and your team will get the answer to the question, “What do we do next?”
Create Next Steps to Improve the KPI
There may be times when you’re tempted to avoid reviewing your metrics.
Maybe when numbers are consistently going up – or worse, going down.
But whether your metrics are showing good or bad news, it’s important that yo9u review them consistently and think about how to improve them.
To optimize, tweak one thing in your strategy and evaluate the impact.
Then, as you review KPIs with your team, ask:
- What’s working? What doesn’t?
- What else can we do to improve KPIs?
Then start making high-impact decisions. Change your strategy. Keep doing what works and get rid of what doesn’t.
Always focus on improving numbers and you’ll achieve milestones and goals.
Be Data-Driven
Trusting your intuition is never a wrong move.
But it has one disadvantage:
It always drives you to take a risk-based on an assumption – which isn’t necessary in decision-making.
You can make a high-impact decision based on data that propels growth in your business.
To recap:
- Set goals and align them with your mission and vision
- Define measurable success through KPIs
- Collect and track KPIs
- Analyze data
- Keep improving your KPIs
Data is one element of our 7-figure system. And our FREE Scalability Factor Training gives you all of the elements to scale your business to 7-figures. Watch it now.