Measure within the plan
About two years ago, a field employee in the company’s air conditioning business discovered data that helped the company addmillions in sales.
One of the key reasons a consumer replaces a system is its age.The company was not tracking the number of service calls that theyran on 15-year-old plus systems, and, in Las Vegas, a 15-year-old system is pretty much shot and should be replaced.
“We were just looking at when our technicians went out to calls,how many people did they present a price to, and then how effective were they at converting that customer into a sale,” Abramssays. “Once we started tracking operations, our sales from ourservice department just accelerated dramatically.”
By tracking that number and holding people accountable to it, theygrew sales $2 million for a 12-month period in Las Vegas.
“That is probably the most dramatic example of a number thatbecame real important to us,” he says.
It’s also an example of why Abrams says metrics are essential torunning his company and keeping it on track with its plan.
His focus on data starts by having one of his subordinates test hismanagement personnel to make sure they understand the company’s strategy and are on board with it.
“That allows them then to talk to their subordinates about whatthe plan of this company is,” he says.
Along with the test results from managers, he also uses keyreporting mechanisms in each division on a daily basis to showwhether the plan is working or not.
With 100-plus salespeople across the country and approximately1,000 employees throughout the company, Abrams needs to seedata to know where the company is succeeding and where it’s failing so he can be proactive in taking action instead of reactive.
“I know what a closure rate should be,” he says. “If all I did was lookat a financial statement, let’s say from our L.A. center at the end ofthe month, I could see either a great performance or a failed performance at the end of the month and respond to it at that time.
“On a daily basis, I can take a look at what our salespeople aredoing. I can take a look at the number of appointments we are running each day. I can see our closure rate, our average sale, and wecan actually respond to that daily if we start to get off track so we’renot surprised at the end of the month.”
Abrams says most business leaders know what data they need,but some are afraid to set a goal in fear of not meeting it.
“To begin with, much of it is logical,” he says. “Most businessowners or executives understand what are the key performancefactors in their business; many of them don’t want to look at it.
“After I stopped teaching school, I went to Weight Watchers, andthe most common reason a person doesn’t begin losing weight isbecause they don’t want to put up something that they might failagainst. Weight Watchers’ biggest objection was always getting a
consumer to come in the door because the first thing we did wasput up a goal weight. I think once you put up a goal weight andunderstand what you are going after, you have a much more likelihood of success.”
Throughout the years, Abrams discovered the main reason people don’t like to see goals set is because they don’t want to be heldaccountable.
“They don’t want to hold themselves personally accountable andsee themselves as perhaps failing against a specific goal,” he says.“So you have to overcome that ego drive that says, ‘OK, I’ll putsomething up here and begin measuring myself, and this is what Ibelieve I can get done.’ Now, you may find that what you perceivedcould be accomplished isn’t accomplishable, and you’ll have toadju
st
those goals downward. But, you’ll never know that unlessyou begin to track them.”
You also need to remember people will judge you if the goalsaren’t being met.
“I think there is a little bit of a fear there that if you start to trackthese things, other people see them,” he says. “So, other people aregoing to start to measure your competence as a leader and as a business manager.
“There are not many places to hide if every key performance factor is being tracked in the company each day, and you’re the guythat dictated that these are the things that are going to be met.Ultimately, it ends up your responsibility to make sure that theyare met.”