Agency Business Metrics give you a reading of your firm’s inherent capability to deliver your business goals. It’s easy to get bogged down with all the minutiae involved in running an agency, and it’s easy to lose sight of some of the very basic issues that could have a profound impact on what you are able to accomplish at the end of the day. In this series we have covered a range of important function specific metrics, but now we need to look at the most fundamental of all metrics, what I call Agency Business Metrics.
Your agency is a vehicle for you to deliver a set of outcomes to your clients, stakeholders and the community. Successfully delivering these outcomes is a function of the effectiveness of your ability to harmonise intellectual capacity, resources, processes and capital. Agency Business Metrics measure how well that is progressing.
The Importance of Measurements
Measurements are the key inputs that drive improvement and change. The adage “what is not measured cannot be managed, the underlying theme in this series of videos, is business canon. In delivering your core business outcomes you need to have a good measure of your organisation’s capacity to do exactly that. Earlier in this series we have covered Client acquisition, operations, staff and clients. Between these categories and the final one, financial metrics, lies the area of agency business metrics. These are measurements of your agencies inherent capability to deliver business results in line with what you set out to do at inception..
Once again, we want to keep things as simple as possible. We need to use as few metrics as we can to give us the necessary insights into critical areas of our agency’s performance.
What Drives Capability?
In order to measure your agencies inherent capability to deliver your desired business outcomes we need to be looking at what drives this capability? Boiling this right down we get to three specific aspects:
- Are we executing our business plan
- Are we building our team effectively
- Are we building our operational capacity effectively
The relevance of each of these agency business metrics varies according to the age, stage and growth agenda of the agency. At first glance these aspects look to be really difficult to measure, but in fact they are not. So let’s deal with these one by one:
Are we executing our business plan?
To be of any practical use at all, your business plan needs to be broken down into a linked series of specific objectives that can be achieved within a specific time frame. The number of these objectives you decide to achieve will depend on the age and size of your agency. Every year you will decide on what these are going to be and as the year progresses you will want to keep of your progress.
So the first of the agency business metrics is ‘number of objectives achieved’. More usefully expressed perhaps as a percentage of the overall number you have decided to achieve within the year.
Are we building our team effectively?
Virtually all agencies are team based. As such the team will play a big role in its success. We are not concerned here with the performance of the team, we’ve dealt with that before, but in our ability to set up that team and to continue to expand it according to our needs..
We can break this down into two areas,
- recruitment which is, finding and attracting the people we want, and on-boarding, which includes how we train and prepare new team members for their role.
- once onboarded we should be measuring how effective we are at getting them to be fulfilling their roles effectively.
If your agency is small, say 10 people or less, having agency business metrics like these is probably not worth the effort as recruiting is not a frequent occurrence. But as you start to scale your agency, you will realise just how essential this aspect is to achieving your growth goals and that’s where it becomes really relevant.
Are we building our operational capacity?
Our operational capacity is determined by our people and our infrastructure. We have dealt with the people issues in a previous video so here we will focus on the structural components that drive our capacity. These are simply
- systems and processes
Systems, processes and documentation are elements that do not require much scale related effort. Once they are established and in use they only require incremental effort to keep them fully relevant and so focus on them in the fullness of time relative to other aspects of the business will diminish, but the use of and adherence to them will continue to be of importance.
So initially we will be measuring roll-out and thereafter adherence.
With these metrics in place, you will be able to get a grip on your agency’s capability for producing the business outcomes that you are after. With appropriate targets, these metrics will go a long way to moving towards your desired business outcomes.