Statistics (Metrics)

Dec 14, 2010 No Comments by Steven B. Paige

762, 208, 894, 38,387 and 15.  What are these numbers?  Statistics or stats for short.  They are the career mosts: Major League Baseball homeruns (762), National Football League touchdowns (208), National Hockey League goals (894), National Basketball Association point scored (38,387) and World Cup Goals (15).  These are some of the most famous stats in the sporting world (USA).  There are certainly a great many more stats that can be added to this list, most Olympic medals (summer or/winter), English Premier League goals, European League goals, Japanese Baseball League homeruns, and so on and so on.  What is the point?  The point is stats are used to show who or what is the best. It can also show you what the worst is (NFL worst 0-16 season).  The point being that you need stats or number to measure how your business is doing or not doing.  For the business world, we call them metrics.  We measure your turn around time for loading and unloading trucks, how long your average employee is employed, to your percentage of your expenses are not variable and has that number changed from last 3rd quarter to this 3rd quarter.  Your profit and loss statement is not and should not be your only guide to how well or poorly your business is currently doing.  Part of trend analysis is looking at your own internal trends and make the necessary course correction to guide your business past the whirlpool that is sucking down everyone around you.  For example, you are in construction and that on every job you know that you have to order four new hammers on average.  However, your hammer inventory never seems to grow.  More than likely, a portion of those newly ordered hammer are being “lost or misplaced.”  Maybe better inventory systems need to be put in place so better accounting for your equipment will not be “lost or misplaced.”  That new system will in turn lower your fixed cost on future job enabling you to be able to get more jobs.  That is just one example of how your own metrics (statistics) can lead to better decisions because you are now armed with better information about your company.

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Steven B. Paige

About the author

Steven offers over 20 years of operational and management experience to financial service companies, banks, mortgage firms, and start-ups. He collaborates with clients on improving operational efficiencies including the creation and management of financial models, complex amortizations, and organization of reporting structures for companies with multiple business units. While working on a new department with Toyota Steve reorganized business reporting and transparency in department spending revealing $300,000 in erroneous vendor payments.
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