Failing to identify and track key metrics is stunting small and medium sized enterprise (SME) growth, according to new data released today by Geckoboard, the live TV dashboard application.
The research found that nearly half (49%) of SME owners have failed to identify any key performance indicators (KPI), the critical metrics which contribute to their business’s growth. Even those that did establish KPIs most commonly only looked at them on a monthly basis. A third of businesses (31%) also said that the key numbers they tracked were never reassessed.
This widespread data denial syndrome is clearly taking its toll, with the research also revealing that more than a third (39%) of SME’s failed to meet all of their growth targets in 2015. The lack of available metrics and information is also making it harder to motivate and focus team members. Half (50%) of British staff admitted that their overall performance was compromised when they were not made aware of key company information and metrics.
However, the research did highlight a smaller group of SMEs who are taking KPI measurement very seriously, with around a quarter (24%) saying they monitor their KPIs in real-time. The research also found these businesses were reaping the rewards of careful tracking - three quarters (74%) of businesses which monitor KPI’s in real time hit all their growth targets, almost twice the average.
The best examples of data-driven companies tended to be managed by a new guard of younger business owners (aged 20-44), who were twice as likely as older business owners to monitor KPI’s in real time. Real time KPI monitoring was also most common in London compared to the rest of the UK, where nearly half (45%) of SME owners said they monitor KPIs in real time.
Paul Joyce, CEO of Geckoboard, said: “With so much available data, entrepreneurs are forgetting to identify which metrics and data are most important to their business using KPIs. This unfortunately means they’re struggling to focus their business on what matters for success If you’re not keeping a close eye on critical business metrics and sharing progress against those KPIs with your team , how can you expect your business to grow? You could also be missing out on important signs for future growth or even worse, signs of trouble ahead.
“There are so many things that are outside of an entrepreneur’s control, but establishing and tracking key company data is not one of them. Businesses which don’t learn to follow suit are limiting their chances of growth before they even get properly started.”