The importance of monitoring all aspects of your business

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Monitoring performance can have a powerful influence on behavior. Just monitoring key metrics can shape behaviors, allowing you to achieve improvements, sometimes without specific conscious actions on how to improve performance. Just knowing that this is an area being monitored can be enough to shape attention to prioritize that specific area. This article explores how monitoring different dimensions of firm performance can result in improvements along those dimensions.  

Keeps you focused on important areas

There is a saying: “what gets monitored, get’s done.” Think about this for a second – there is a lot of truth to it. Setting and monitoring key objectives helps you stay focused on those key objectives. If you are continually reviewing progress against those objectives they are front and center in mind – it is much more likely that you will prioritize actions that improve these key targets if you are systematically reviewing them. Even if they act solely to hold yourself accountable for staying on course, monitoring performance can serve an important role in keeping you focused on achieving your goals. 

Helps you identify - and correct - a mismatch between expectations and performance

You will likely have some expectations for the outset of desired performance levels. Perhaps you know what is typical performance levels in your industry, or have a sense from past performance levels on various dimensions that you should be able to achieve.

Monitoring dimensions can alert you if you are not hitting these expectations. Sometimes there is a good reason why you have not been able to make your objectives – and potentially one that when brought to your attention through a performance-expectation mismatch you are able to rectify.

Helps align team objectives

Having objectives in place also make it much easier to align a team around achieving the goals. Without goals, each individual in the team will likely each have their own views over what is important – potentially pulling the group in slightly different directions.

Setting an overall goal helps align everyone around the same goal, increasing the agreement between individuals in actions taken to achieve the overall objective. 

Allows you to track performance over time

If performance is substantially outside of your expectations the problem may be self-evident. A much worse situation is when there is a gradual change in performance over time, so gradual that you are not aware of it creeping in a particular direction.

A common example in day-to-day life is weight – if you never check your weight it may gradually increase without you realizing it. Exactly the same thing can happen in business – there may be key areas that gradually degrade. Each month every so slightly worse than the previous, but not so significant that you are able to detect the degradation. 

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