How to Focus Your Team on What Matters FOUR Key Metrics to Scale Ep 133



In a recent Gym Launch podcast, the host discussed the importance of identifying and focusing on four key performance indicators (KPIs) to streamline business growth and decision-making. The host emphasized that by concentrating on increasing opportunities, improving closing percentages, reducing churn, and maximizing profits, businesses can effectively prioritize tasks and align their teams' goals with these metrics. The host shared insights from their quarterly meetup, underscoring how these KPIs serve as a guide for all departments to eliminate unnecessary tasks and focus on what truly matters for growth. By applying this targeted approach, businesses can optimize their resources, engage their teams in creative problem-solving, and achieve a clear direction for scaling their operations.

Summary Notes

Importance of Quarterly Meetings and Strategic Focus

  • Quarterly meetings are crucial for team alignment and strategic planning.
  • The speaker emphasizes the value of crystallizing ideas and planning necessary actions during these gatherings.
  • A key outcome of the meeting was the identification of the four numbers that are most important for the speaker's business strategy.
  • The speaker suggests that understanding these numbers can help prioritize tasks and cut out irrelevant activities.

"But coming off our quarterly meetup, which is where we have all of our directors fly out so that we meet in person, there were some really interesting things that I kind of wanted to... I feel like that they crystallized over the span of the week that we were together, kind of planning everything that needed to happen."

The quote explains that the quarterly meetup was a time for directors to meet in person, crystallize thoughts, and plan actions, highlighting the importance of such meetings in setting strategic direction.

The Four Numbers as a Decision-Making Framework

  • The speaker introduced four key numbers as the primary focus for decision-making.
  • These numbers serve as a guiding light for both the speaker and their staff.
  • By focusing on these numbers, the team can make decisions with clarity and peace.
  • The speaker's introduction of these numbers after team presentations indicated a missed opportunity for earlier alignment.

"And so the four numbers that I'm looking at and all of the activities that I'm tracking our team and myself towards are, one, increasing opportunities."

The quote identifies the first of the four key numbers, which is "increasing opportunities," signifying its importance as a primary goal for the speaker's business activities.

Increasing Opportunities Across All Business Aspects

  • Increasing opportunities is a goal that should be embraced by every part of the business.
  • By focusing on how each role can increase opportunities, the entire team contributes to growth.
  • The speaker points out that it's particularly interesting to explore how non-sales roles can contribute to this goal.

"So if you think about this from every aspect of your business... If each one of them can answer you how they increase opportunities for the business, then everyone is a, focused on doing one thing, which is growing it, but b, knowing what they can specifically do to get more opportunities for the business."

This quote emphasizes the need for all team members to understand and articulate how their roles contribute to increasing business opportunities, highlighting a unified approach to growth.

Clarifying and Communicating Key Performance Indicators (KPIs)

  • The speaker stresses the importance of clearly communicating the KPIs to the team.
  • There is often a disconnect between what the owner focuses on and the team's understanding of KPIs.
  • Repeated communication and goal alignment with KPIs can significantly benefit both the business and its employees.

"And it gets really interesting... a lot of people don't even know what your KPIs are. And it seems obvious to you because it's all you think about, right? But for people who are in your a team, it won't be obvious, right?"

The quote reveals a common challenge where team members may not be aware of the business's KPIs, which are often second nature to the owner. It underscores the need for explicit and frequent communication of these indicators for effective team alignment.

Engaging Team Members in Growth Activities

  • The speaker encourages asking team members how they can contribute to business growth, even outside of sales roles.
  • The discussion includes exploring various ways to generate more opportunities, such as asking for referrals, posting on social media, and including calls to action.
  • Engaging team members in this way helps them to think creatively about their role in the business's success.

"I can ask for referrals, right? Okay, great. What else can you do? You know what I mean? I guess I could be posting. Okay, cool. What else can we do, right? I should always put the link there. Great. We always have a call to action for all the posts we do as a community."

This quote demonstrates how the speaker engages with team members to brainstorm different methods of creating opportunities, reinforcing the idea that everyone has a part to play in business growth.

Increasing Opportunities

  • Discusses the importance of team members understanding what is expected to facilitate business growth.
  • Emphasizes that lack of performance is often due to misunderstanding, not malice or laziness.
  • Suggests that clear direction leads to both leader and team satisfaction.

Now everyone's doing the stuff that I want so that they can grow the business. And then you're happy. And they're happy because you're happy, right. Because most people on the team just want to do a good job, right.

This quote explains that when team members know what is expected of them, they are more likely to contribute positively to business growth, resulting in mutual satisfaction.

Increasing Closing Percentage

  • Focuses on the significance of converting leads into sales.
  • Considers various factors like lead nurturing, sales environment, offers, pricing, and the sales process.
  • Encourages looking at different strategies to improve the rate of successful transactions.

The second one is increasing closing percentage right now that factors in lead, nurture and sales, but it's just kind of one percentage number that you can focus on, right?

This quote highlights the goal of improving the proportion of leads that result in sales, which involves multiple aspects of the business process.

Keeping Churn Below a Certain Percentage

  • Aims to maintain customer retention below a specific threshold.
  • Encourages a holistic approach, involving all staff in the effort to reduce customer turnover.
  • Stresses the importance of creative and role-specific strategies for churn reduction.

So for the gyms, it's below 3%. Okay, so how do we get it there and keep it there indefinitely?

The quote sets a clear target for customer retention, which is critical for sustainable business growth.

Role-Specific Contributions to Reducing Churn

  • Advocates for the idea that every team member has a unique role in minimizing churn.
  • Suggests that different perspectives can lead to innovative solutions.
  • Highlights the value of team input in identifying effective churn-reducing tactics.

How can the trainer cut churn? How can the front desk person cut churn? How can the billing person cut churn?

This quote underscores the speaker's belief that every individual in the organization can contribute to reducing customer churn from their position.

Aligning Team Goals with Key Performance Indicators (KPIs)

  • Discusses the need for aligning team objectives with specific KPIs.
  • Encourages asking targeted questions to ensure goals are contributing to the main business metrics.
  • Suggests dismissing initiatives that do not convincingly support the KPIs.

How is that going to increase these four numbers? And if they can't answer it well or convincingly, then you can just say, we're not going to do that.

The quote emphasizes the necessity of aligning team efforts with measurable outcomes that are critical to business success.

Prioritization and Decision-Making

  • Stresses the importance of prioritizing tasks that have a significant impact on KPIs.
  • Encourages leaders to make hard choices based on what will most effectively drive growth.
  • Suggests using extreme hypotheticals to clarify priorities.

If you had to bet your child's life on which one of these things is going to increase, which one would you do, right. Then people prioritize the things that actually matter and are actually going to grow those KPIs.

This quote illustrates the speaker's method of prioritizing by considering which actions are most likely to lead to an increase in critical business metrics.

Increasing Profit Margins

  • Focus on increasing profit margins by decreasing costs.
  • Eliminate expenditures that do not provide value or asymmetric returns.
  • Avoid spending resources on activities with disproportionate returns.

"The last one is finance related, which is just profits, which is how can we increase our profit margin? What are the things that we can do to decrease costs in the business."

This quote emphasizes the importance of focusing on profit margins by reducing costs in a business.

"And ideally, decreasing costs from things that don't provide value or don't provide asymmetric returns in value."

The quote highlights the strategy of cutting costs by eliminating activities that do not provide significant value or returns compared to the investment.

"That's where you get uneven exchanges, where you're like, maybe there's a return, but maybe it's not a proportional return to the amount of time and effort that you're putting into it."

This quote explains the concept of uneven exchanges, where the returns do not match the effort and resources invested.

Evaluating Business Activities

  • Assess activities based on their return on investment.
  • Compare the value generated by an activity with the time and resources spent.
  • Consider alternative activities that could yield higher returns.

"So an example of that might be something that you put a dollar of time and attention into but only yields fifty cents of value."

The quote provides an example of a poor investment of time and resources, where the output is less than the input.

"There's a million things you can stand on the sidewalk with a sign. I mean, it's not going to hurt your business. Right. But in terms of the time and attention that it takes to do that, what other things could we do with that same time and attention? And could we get disproportionate returns on that using that method."

This quote suggests evaluating business activities based on the potential for disproportionate returns and considering alternative methods that could be more effective.

Aligning Goals with Key Performance Indicators (KPIs)

  • Ensure all company activities align with the four key metrics.
  • Departments should focus on goals that directly impact one of the key metrics.
  • Eliminate goals that do not demonstrably contribute to business growth.

"And all of the goals that you guys have all written down of the things that you want to do in this company should track back to these four things."

The quote directs that all company goals should be aligned with the four key metrics to ensure they contribute to business growth.

"If you can't demonstrably show me how it's going to increase one of these four things or improve one of these key metrics, then cross it off."

This quote stresses the importance of having measurable goals that clearly impact the key metrics, and discarding those that do not.

Prioritization and Resource Allocation

  • Prioritize tasks that contribute to the four key metrics.
  • Evaluate the cost of tasks in terms of time and attention.
  • Reallocate resources to tasks that offer greater returns.

"And the two follow up questions are, once you have something that you think, yes, it relates to that KPI, the follow up is, okay, how much will that cost me in time and attention? And what else could I do with that same amount of time and attention. That might increase it more."

The quote suggests a two-step evaluation process for tasks: confirming their relevance to KPIs and assessing their cost versus potential alternatives.

"And so it allows you to think creatively. Allows the team to think creatively, for me, at least. Most importantly, it just allows you to cut out the noise because there's so many things that you feel like you should do."

This quote describes the benefits of the evaluation process, including fostering creativity and eliminating non-essential tasks.

Business Growth and Profitability

  • Recognize the importance of profitability and top-line revenue.
  • Understand that the focus on profitability or growth depends on the business stage.
  • Prioritize metrics based on current business needs and strategies.

"And so figuring out what your four key metrics are, those are mine right now and in priority for me. Because of the stage of growth that we're in right now, profitability is not as important to me."

The quote explains that the speaker's current focus is on growth rather than profitability due to the stage of their business.

"But that being said, for the first seven years of business, for me, it was 100% focused on profit."

This quote provides insight into the speaker's past focus on profitability during the initial years of the business.

Decision-Making Context for Small Businesses

  • Prioritizing profit over growth is generally advisable for small businesses.
  • A small business is defined as having less than 100 employees in U.S. terms.
  • Focus should be on the "big four" metrics: increasing opportunities, increasing closing percentages, decreasing churn, and increasing profit.
  • Activities should be traced back to their impact on these four metrics.
  • If one metric is lagging, the entire team should laser-focus on improving it, while maintaining the others.

Because I might be doing something with different priorities than you. But for the most part, most people, most of the time, prioritizing profit over growth is going to be a good idea most times for a small business.

This quote highlights the importance of aligning business activities with the right priorities, specifically suggesting that profit should often take precedence over growth for small businesses.

Quarterly Meetings and Team Focus

  • Use quarterly meetups and team meetings to assess business metrics and identify weak points.
  • Direct the team's attention to improving the weakest metric.
  • Ensure everyone understands their role in moving the key metrics forward.
  • Eliminate unnecessary tasks that do not contribute to the business's growth.

And so that's all you do in these quarterly meetups, this is all you do in your team meetings, is assess where we're at, assess where the weak points are, and then focus everyone's attention on increasing that one thing.

This quote emphasizes the importance of regular assessments of business performance and the strategic focus on improving specific areas identified as weak points.

Prioritizing Actions and Time Management

  • Successful business owners prioritize actions that directly impact key growth metrics.
  • Many business owners waste time on activities that do not contribute to growth.
  • Encourage team members to understand and focus on the four key metrics.
  • Cut away all activities that do not significantly move these metrics forward.

The only reason is because those people prioritize actions that are more linked, more directly linked to the key metrics that grow the business.

The quote explains that prioritizing actions that have a direct link to key business metrics is essential for faster advancement and success.

Simplifying Business Strategy

  • Keeping business strategy simple can lead to success.
  • Focus on improving metrics that are not currently performing well.
  • The simplicity of the strategy makes it easy to implement, but also easy to overlook or neglect.

And I know this sounds simple, but simple is the types of things it's so easy to do and it's even easier not to do.

This quote acknowledges that while the strategy is simple to understand and implement, it is often neglected due to its simplicity.

Encouragement and Next Steps

  • The speaker encourages listeners to have a productive Tuesday.
  • They suggest listeners determine their own four key metrics.
  • The speaker is driving their company towards these metrics and encourages others to do the same.

So anyways, I hope you guys have a terrific Tuesday. Taxable Tuesday, turn down Tuesday, get shit done Tuesday. And if you are thinking about what to do, maybe figure out what your four metrics are.

The quote serves as a motivational close, urging listeners to focus on defining and working towards their own key business metrics.

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