No, it’s not when your spouse says mean things about your reverse parking skills… a ‘Critical Driver’ is a
critically important factor that determines or causes an increase in value or improvement in your business. Identifying & monitoring key Critical Drivers are crucial to boosting profitability. Allow me to explain:
I like to compare Critical Drivers in business to driving a car. When driving a car you monitor the fuel gage, the speedo, the oil (the dashboard). Monitoring this tells you important factors about how fast you’re going and if you’re going to get there with the fuel you have. In business, if you don’t know the dashboard drivers then you will end up at the end of the year wondering why you didn’t achieve the goals you set out to.
Critical Drivers are imperative to the success of your business. When mapped out and monitored with discipline, the results will speak for themselves.
There are a range of factors that can impact the performance of your business. The
secret is to focus on a handful of key Critical Drivers that:
- Are measurable
- Will reflect progress and performance in your business
- Can be acted upon
- Can be compared to that of previous periods
In order to establish what your key Critical Drivers are, you might first start by asking yourself:
- What drives sales figures? # of leads, conversion rate, # of customers, # of customer transactions
- What drives costs? Labour, supplier pricing, margin on sales
- What drives cash flow? AR days, AP days, supplier trading terms, inventory days, WIP
- What is my growth potential for new customers?
- What is going to set me apart from my competitors?
Your advisor can assist you to identify the top 5 drivers for your business and how best to monitor these.
Book a discovery session
Efficiency Partners works with clients to identify Critical Drivers and set up more efficient systems & processes that will allow you to monitor, test and measure.
Call (07) 5441 1500 to nail your Critical Drivers.