The assessment of the returns on investment (ROI) of human capital can get you into a tricky territory. Unlike other resources, you cannot have an absolute objective assessment of human resources. I would not suggest you to do so either. People should not be judged solely based on some metrics on a dashboard. Contribution of employees go beyond numbers reflected in performance reports. However, as a business owner, it is important you measure the ROI of human capital.
There is always a method to the madness. All complexities in life and work have a simple solution somewhere close, out of sight. Leadership is one such complexity. While there are a million resources to enlighten us on becoming a better leader, I rank this one quality as the most rewarding.
What gets measured gets managed. You would have heard this several times. There is so much focus on measuring and reporting all data that is easily available. This leads to information overload. Colorful charts on the projector screen scream for attention. Quite often, teams waste energy and time on meaningless reports. What are you monitoring? What are your goals? Are you chasing the right goals?
Increase in sales revenue and profitability are the two most common objectives for every business. Businesses measure month on month, quarter on quarter, year on year growth in sales. However, it is important to segment the growth data for actionable insights. How do you measure business growth? Do you look at the overall trend? Do you segment customers into groups and monitor trend for each group?
Performance reports and dashboards often report the average values. When measured alone, averages tend to lie. Understanding the variation along with the average performance and addressing the root causes for variation will help you better conform to customer expectations.
“For a report to be actionable, it must demonstrate clear cause and effect”. Eric Ries made this argument in his bestselling book “The Lean Startup”. He is right to stress on the importance of monitoring actionable metrics. Quite often we get into the trap of vanity metrics. Either these vanity metrics look good or the data is easily available. However, as the name suggests, these do not lead to any action as cause and effect are not established. Have you identified actionable metrics for your business? What metrics do you monitor?
Our judgement, reactions and actions are influenced by our instincts and bias. Our experiences and learnings influence our instincts and bias. In life and at work, perception bias affects our judgement. Most of the times, we do not realize the implications of perception bias. Here are 3 tips to minimize the effects of bias.
Profitability and sustainability for most businesses depend upon customer loyalty. Repeat transactions from customers is what every business aims for. You may have heard about the concept of measuring customer life time value (LTV). There are several strategies and tactics businesses use to lure customers into repeat and more frequent transactions. Delivering a great customer service is one of these and is a zero cost strategy.
Average job tenure now ranges between 2 years to 3 years. If we were to plot global average job tenure in the last 2 decades, it certainly would be a skewed distribution. Switching a job in less than a year or two is no longer considered a taboo. Let us share 6 tips for succession planning for your organization.
This has been a year of forced changes. The global pandemic has forced us to change the ways we live, work and interact. It certainly has given a push to everything digital. Online shopping, online classes for kids, webinars, video calling, online doctor consultations. The shift in consumer behavior towards digital needs an identical shift in business strategies. It has been so for the past few years. However, digital will play an even bigger role in sales and marketing. How to plan your small business marketing strategy in 2020.