A lot of entrepreneurs are creative visionaries who are great at leading their team, but they still don’t seem to get the results they should.
The bad news is that most don’t even understand why that’s happening. The good news, however, is that the solution is pretty straightforward, and in my opinion, pretty easy to implement too.
So what is that solution? It’s to make sure your entire team understands your numbers and how their role influences them.
Most entrepreneurs don’t do that, and the reason actually makes a lot of sense. Employees are already stretched thin, driven by today’s highly competitive business environment, so piling more information on them can seem counterintuitive because it may add more to their already full plate. But the reality is that when given the right information, they will make better decisions that more closely align with your company’s goals, making your entire team both more productive and more effective.
This is something I implemented in my own company many years ago, and the impact it’s had on our growth has been significant, helping to drive it from just over $1 million in annual revenue to well over $8 million. So in this article, I’m going to break down why your entire team needs to understand your numbers.
Decisions need to be based on data
While you’re leading from the top of your organization, your employees are on the ground, in the trenches, dealing with the day to day operations.
Think back to what it felt like when you were in their position. You likely had your own perspective of what should be done at any given time based on the information you had available to you at that time. It was also likely that the information you had was limited at best, leading you to make decisions that not only didn’t move the company forward toward its goals, but also likely held your company back from its goals.
These less than optimal decisions weren’t made out of malice or general ignorance, but rather a limited perspective or worse yet, a hunch or vibes.
You made them without a full understanding of all necessary data. Your employees today are in that same exact position for the same reasons.
But you can reduce or eliminate this issue by making sure your entire team truly understands your numbers. When they do, they can make better decisions based on revenue, costs, and profitability—the lifeblood of a company.
The big picture creates more alignment with goals
It’s easy to become myopic when you’re in the trenches because employees are focused on their job and the metrics surrounding it. But often, this is not in alignment with achieving your company’s goals.
For example, your social media team is probably measured by the number of the amount of impressions they generate for your brand. That’s a perfectly valid metric, but in a bubble, it’s meaningless.
Think about it like this—if they’re measured primarily on impressions, they may implement strategies that will indeed dramatically increase the number of impressions your company’s social media profiles generate, but if that audience doesn’t match your ideal demographic and your efforts don’t convert to paying clients, it’s pointless. That doesn’t help your company achieve its goals.
On the other hand, if impressions are going up along with revenue that can be attributed to that increase, then it will help your company achieve its goals.
At the end of the day, a company needs to be profitable to continue operating, so we need to ensure that our team understands exactly how their role and KPIs integrate with your company’s goals.
Your team will see trends before you
As the leader of your company, you’re a lot like a military general hovering in a helicopter at 30,000 feet above the battlefield to direct a tactical operation.
From this vantage point, you see things your team can’t. But at the same time, your team can see things from their vantage point on the ground that you can’t.
Both perspectives are important, but most leaders only see their own.
This is where your team comes in.
The data they see can give you valuable insight that helps you make better decisions, adapt more quickly, and capitalize on opportunities.
Maybe your social media team notices that ROAS on your paid ads campaign is going up not because of ineffective strategies, but because overall costs on a particular platform are going up. And maybe at the same time, your SEO team is getting better results than usually, driving more traffic at a lower cost.
You likely would never see this granular data yourself, but if your team knows that you want them to bring things like this to your attention, it could give you an opportunity to reallocate resources to cut back on paid social ads and increase SEO efforts, helping your company to reduce marketing costs and increase conversions and revenue.
Think about all the data that your entire team sees in the course of simply doing their jobs.
Now, if they understand your numbers, know your goals, and have been told that you want them to share any data that can help you make better decisions, they’re going to bring you that actionable to empower you to adapt.
This is a powerful way to ensure your company not only survives, but thrives through economic downturns and scales dramatically during periods of prosperity.