A Critical Number is a KPI (Key Performance Indicator) that helps you keep track of the most important thing for the quarter or year. For example, I’d bet this quarter Apple’s critical number is the number of Apple watches sold. It’s where the company is currently focused on spending their time and energy. So, if it’s the most important thing for the company, why is it so often ignored when it turns red? It’s critical and it’s red, but why is there no urgency to solve the problem?
Rhythm Blog | Critical Numbers
by Patrick Thean and the Rhythm Team
Welcome to the idea of critical numbers. Every executive team has them (measured or not) and when you begin a new quarter, they should be top of mind. Critical numbers are key drivers that influence business performance. When you correctly identify these numbers, you’ve reduced the threat to your department or company and have increased your chance for success. Critical numbers are necessary for your company workout.
In my initial blog “How to Create KPIs that Drive Your Company's Success,” we focused on the most common form of metric, Key Performance Indicators or KPIs. A future blog post will talk about targets and how to set them to drive your desired results. Today, my post will focus on Critical Numbers, a special set of measurements that help your company drive towards one of its top goals. An easy way to think of Critical Numbers is to think of them as “most valuable” or MVP KPIs, the most important metrics for your company to track right now.
As you attempt to control your business and your team's effort, you will likely be attracted to dashboards. And the first question you should ask is “does the dashboard make the team accountable, and does it give them the data needed to make the right adjustments to hit plan?”
Are your critical numbers working for you? The key to accomplishing your goals is execution. Critical numbers help ensure you are executing effectively while making the necessary adjustments each week. Some of you might be asking the question “what is a critical number?” Critical numbers are the top KPI’s that drive success for the quarter and the year. They keep you focused on your theme or main thing and drive success on your priorities. We recommend having one that is process oriented and one that is people focused to make sure you have a balanced approach. Here are the primary categories to consider when developing your critical numbers:
So... What do you do if your critical number goes red? How do you increase team urgency?
Your daily huddle is fast and sharp. It's a quick sync up that helps your team align for the day. It is not for solving problems. When we do learn about problems in the daily huddle, we take it offline with the right few people to solve it.
Thank you to everyone who joined my Critical Numbers webcast today. For those who may wish to hear or share it. Enjoy!
I am going to be sharing about how to use Critical Numbers to move big rocks and achieve great things with your team. It is so important to know what the most important thing to do is and stay focused on it until your team crosses the finish line. Stephen Covey said it best a long time ago when he said "Begin with the end in mind" in his mega seller 7 Habits of Highly Effective People. My clients shared with me that often they do begin with the end in mind. Unfortunately, they were not able to continue and complete their quarters and years with the end in mind.
Somewhere along the way, stuff got in the way and focus gets diffused. What should they do to maintain this focus after they began with the end in mind? And this is compounded exponentially when you have to get your entire team to begin and stay focused on a singular thing until you cross the finish line and win as a team.