One of the chief problems is that metrics often obscure value.
Business success occurs in the marketplace, not in Excel or in
Powerpoint. It’s easy to get so caught up with key performance
indicators that you forget about performance in the real world.
Managing a business is different than managing a budget. The outcome
of an investment is not solely, or even primarily, a function of
efficiency. It matters where you invest. Resources allocated to a good
business will work harder than those that are put towards a bad one.
That’s why it’s crucial to rightsize investment. Here’s a quick guide.
First, the obvious. Some businesses are inherently better than
others. A good business makes lot of money and grows rapidly. A bad
business brings in poor revenues and grows slowly or not at all. That
simple truth, more than any fancy math, is key to successful investment
(and, curiously, often overlooked in marketing circles).