Measuring the performance of each area

No matter how small our company is, it has different sectors and specialized areas from which all the further development of our products, services or business structure arises. A very effective strategy to minimize the risks and losses associated with growth is to know how to efficiently measure the performance of each of these areas or sectors.

The overall results of the company are useful only if we want to know if we are profitable as an organization or structure in general, but this does not reflect the real performance we are having in each sector in particular, where it may be a specific one that is giving outstanding results while many others are in losses.

Below we will approach this subject from the most basic aspects that you should know about it.

What does this strategy consist of?

Measuring performance in each area is nothing more than making an evaluation in each sector in particular without taking into account the overall results of the company.

This means that regardless of whether your company is doing well, each area will be analyzed and judged according to its particular results.

Let's take the example that you are in the business of producing handmade clothing, you are having good sales and your customers love your product. That said, once you measure the performance of the production and communication areas, the results may be very positive, but when we look at the physical stores you own, you may notice that they are in losses, because the sales are not enough to cover the rents of the premises.

So maybe your positive results are due to your online sales but the physical sales are a failure. How should you update this if you already have this information?

Correct or eliminate loss-making areas

Some areas of your business can be corrected or eliminated, while others you will have to correct anyway as they cannot be eliminated. For example, in the case of the physical stores mentioned above, you have the option of eliminating those stores and focusing on what is working well for you, which is online sales, or you may want to try to correct them to make them profitable as well.

But if the example is that the losses are in the production cycle, because it is not adequate for the final price of the product, the only option you have is to correct this area, because if the production cycle disappears you would have no product to offer to your customers.

Measure the performance of your workers

A more particular sector is that of your workers, as individuals they also have individual results, so measuring their performance as a workforce in general can give us wrong data. This type of measurement can be much more complex than that of the areas, it all depends on the size of your company and the relationship you have with your workers, in any case you can help your managers by areas to learn more about where the greatest deficiencies may be in your workforce.

Similarly, this measurement can focus on knowing what aspects are influencing the extraordinary performance of a certain worker, whether negative or positive. In the case of the positive aspects, it can be useful to extend them to the rest of the workers; and in the case of the negative ones, to correct them and prevent them from spreading to the rest of the staff.

The workers are the most valuable assets of any company, since they are the ones who make up the essence of the business and who are behind all the results obtained.