December 2023 Round-Up: What's Your Business' Critical Number?

All businesses have a critical number, but most businesses need to learn what that number is.

As a result, many metrics are tracked in dashboards that are reviewed but not acted upon. This activity is generally complemented by a rearview mirror profit/loss statement analysis (and typically, this is done far too late to influence future short-term to medium-term outcomes.) 

So what do you do? Determine your critical number, measure and manage it in real-time, and work backwards, building systems and team alignment around driving performance for that number.  

What is a critical number? A critical number is the one thing a business must do to achieve its primary goal. That could be driving revenues, acquiring customers, reactivating customers or increasing EBIT. This number may change over time as it may be the thing you need to focus on for a quarter to make a correction, or it could be the number to focus on for a year to hit your annual goal.

The point is to take the time to figure it out and focus on it. The two numbers everyone knows are their top line and bottom line. Those are not your critical numbers; they happen because of your critical number.

A critical number may be:

• Referrals 
• Recovery Rate
• Retention Rate
• Production Throughput
• Discovery Meetings Booked
• Leads
• Win Rate
• Successful New Employee Onboarding
• The list goes on and on, as all businesses are unique.

To figure out your critical number, you need to be willing to analyze your business because, at first, it often isn't apparent. Start with the months in which you had the best results. Review the behaviours that caused that month's results to occur. 

Dive into the particulars. 

For instance, in one business I led, demand for the product wasn't the concern. Producing to meet the demand was the concern. The supply chain was not a constraint, and process efficiencies had been optimized (although there was still room in this area). The biggest constraint was the number of production line moves, which created throughput. The constraint to line moves in a tight labour market was on-time perfect attendance. 

Our critical number became perfect attendance so teams could start on time and achieve the maximum line moves with the needed staff for the whole production shift. We gave staff bonuses for perfect attendance; perfect attendance jumped to double digits, and production went up, as did sales. We dove into the particulars to find the real growth constraint and our critical number.

For Roadmap, my critical number is 15 (everyone on the Roadmap team knows the number, and we work towards achieving it). We also have hit the critical number for October and November, and guess what? November has been our biggest month since the start of our company. 

We also know it in real-time:

• As of December 5th, as I write this message, the number has reached 6. 
• I reviewed this number while writing this email in an airport in Vegas. 
• Our systems gather and track the behaviour, which is available in real-time on a cloud dashboard.

I suspect we are in for another good month ahead.

That is what you need to do, too.

If you want to have a conversation about determining your critical number give Steve a call.  He's always happy to dive into what really drives a business.

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CDAP Update

Did You Know? Only 53,000 of the potential 600,000 Canadian small-medium enterprises have engaged with the Canadian Digital Adoption Program. And only about 15% of those have claimed a grant. As an approved digital advisor, Roadmap wants to help all eligible businesses seize this opportunity. In today's modern economy, there's significant room for online and digital growth. Act now and don't leave potential funding untapped. Talk to us today to see how Roadmap can facilitate your digital transformation journey.

What CDAP can do for your business?

Roadmap offers a spectrum of CDAP projects from strategic planning to digital marketing enhancements. Select as many modules as you need to build a custom digital adoption plan for your business, and take advantage of the CDAP funding before the program ends in March 2025. A few examples to choose from:

• Strategic Foundations
• Technology Audit
• SEO Game Plan
• Persona Development
• Competitive Analysis
• CRM Functional Requirements
• Website Workshop
• And more!

We’ve compiled all the information you need to know about the Canadian Digital Adoption Plan (CDAP) into one convenient download. Get the details on how to build the plan, pricing and information on how to apply.

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