Why monitor business growth strategy?
After deciding on a business growth strategy to pursue and putting it into action, you shouldn’t be complacent. You have no assurance yet that the strategy you’re using is the best one for your business. Monitoring it regularly is key to determining if the business is really moving in the right direction.
Monitoring the performance of your business helps sustain growth because you make sure that you’re actually meeting the goals you’ve set. Aside from that, you’ll be able to find problems that need your attention before they get worse. When you know how your business is doing as a whole, you can adapt and adjust your strategy so that it remains effective.
Common mistakes to avoid
When monitoring performance, there’s no universal process that you need to follow. You’re free to create standards and systems that fit your business model, but they should still be based on proper practices. To monitor your strategy in the best way possible, you should avoid doing any of these common mistakes.
Monitoring irregularly
It’s crucial to make sure that everything in your business is always progressing, which also means you have to perform strategic reviews regularly. Don’t wait for problems to come in before you start assessing your operations and financial status. Remember that it’s best to set aside dates or checkpoints for monitoring so that you can collate data and insights to better manage your business.
This doesn’t mean you have to check in every day, as it can be disruptive to your business’s operations. Try setting different target timelines for certain departments or objectives, so that you also have time to review your performance metrics and decide how to improve. You can monitor some on a monthly basis, while quarterly or yearly is fine for others.
Moreover, monitoring at regular intervals allows you to discover trends and patterns. Whether positive or negative, you can take action on it accordingly. It can also provide valuable insights when creating an overall assessment of the business or figuring out your next steps.
Not following a consistent process
It’s not just the time you monitor that has to be consistent. Your process has to be consistent too. This can include the metrics and tools you use to measure, how you acquire this data, and the people in charge of them.
Monitoring is not a simple process, after all. When your business is growing, there are more people, financial accounts, and business units you have to check on. Having a system for how your business will be monitored sets a standard that everyone can follow for complete and accurate data at all times.
You’ll be grateful for a consistent process in the long run. You can produce comprehensive monitoring reports, which allow you to see the progress of your business over time. These can also guide you in making well-informed decisions for the future.
Using the wrong metrics and tools
Monitoring is greatly correlated to measuring, which entails getting in-depth data to help you analyse actual performance. If you aren’t measuring the right thing with the right strategy analysis tools, then you might also get inaccurate results. This is why you have to go back to your objectives because they can help you determine the correct metrics and tools to use.
Let’s say you want to measure your business’ market penetration. Just looking at the numbers in your profit and loss accounts won’t cut it because those only show how much money you earned or lost.
Market penetration looks at the increased use of your product or service in your target market. This means you need to measure things like how many new clients you were able to bring in, how big of a percentage of your customer base were you able to maintain, and other related figures.
However, don’t discount the other data you also have on hand. These may come in handy in determining the performance of other aspects of your strategy. You just have to understand which metrics and tools should be used to monitor certain objectives.
Failing to look at the whole picture
As previously mentioned, monitoring is correlated to measuring, but it’s more than tracking numbers and results. When monitoring, you observe, analyse, and evaluate. Use the data presented to you to see the whole picture and better understand how effective your business growth strategy is.
This means that you have to take time in monitoring your strategy. Don’t flag things immediately as unsuccessful when they aren’t meeting targets. Pause and see if there’s some sort of roadblock you need to resolve to turn things around.
Important things to remember
Assess and take action
Monitoring isn’t the end of executing your strategy. It’s a cycle, so go back to the beginning: the strategic direction. With the information you gained after monitoring, ask yourself if the business performance is aligned with what is expected.
After assessing, what action can you take? What can you maintain, improve, and correct? Doing this every time you monitor will prevent your business from becoming stagnant in a competitive environment.
Don’t be afraid to make changes
Sometimes, you may realise that your business strategy might not be working as well as you hoped. You might not be meeting objectives or you may be losing a lot more than what you put in. These can be major indicators that your strategy needs to change.
Don’t be afraid to shift your plan or perform strategic growth planning for the better. This is one of the reasons we do monitoring.
You don’t want to be stuck trying to find solutions to a strategy that wasn’t fit for your business in the first place, so be open to changing it altogether. It’s a much better use of your time to figure out a new strategy than working on one that’s bound to fail.
You can also seek help from experts to guide you when you monitor and refine your business growth strategy. Boardroom Advisors offers a variety of seasoned directors that can support you and your board members in running the business. They can give the necessary advice for scaling your business and monitoring its growth in the long term.
