Many managers are too reactionary, only noticing an issue when it’s big enough to cause problems. But the right business metrics inform proactive decision-making.
There are many approaches to managing a business. But when you need a solution that will help you motivate your team, manage risks, and make better decisions, a proactive approach is a must.
Learn why being more hands-on and acting preemptively will not only inspire your team but also mitigate risks and give you greater visibility into your business. This is done by measuring key processes that help you understand what’s really going on.
Proactive versus reactive management styles
Reactive managers act when something concrete happens, triggering movement. They wait for an event to occur before finding a solution, instead of risking a wrong decision. They may see this approach as mitigating risk because they’re not making a change unless they know something is wrong.
Proactive managers, on the other hand, don’t wait. They act from the beginning to inform outcomes. In this way, a proactive approach allows you to have more control over both risks and results. You’re more prepared for what’s coming, instead of waiting to see what happens. And being proactive means that problems can be prevented, instead of merely managing their consequences.
More benefits of proactive management
The main advantages of proactive management revolve around risk. It’s an effective strategy to both reduce risk and better manage issues.
Key benefits include:
- Assess and manage risks. Unlike a reactionary approach, proactive leadership means you’re thinking about risks before they happen, and preparing for them.
- Minimize damage from these risks. Reactive managers may see a risk but won’t act unless an adverse incident occurs. Managing proactively means taking steps to address things before damage can happen.
- Greater understanding of your business. By gauging risks and measuring business processes, managers have a better picture of what’s happening behind the scenes, helping them know which areas need work, and which are working well.
Proactive managers also inspire their teams to act instead of waiting. This effect is a major benefit—motivating and enabling employees by setting a solid example. Empower the entire team with a more hands-on attitude toward business challenges and risks.
Using metrics to be more proactive
So, how do you successfully implement your proactive management plan? It’s all about metrics. You’ll never know how to plan for the future and predict challenges without knowing concrete numbers about your business.
Financial metrics are likely the most important, informative things to track. They give you a full picture of ROI, sales, your business’s ability to meet goals, and potential growth.
However, they aren’t the only numbers you need to be measuring. Operational and marketing metrics are just as important to gauge the success of your organization and help you make the right decisions. Common operational metrics include numbers like staff response times and the time it takes to create or ship a product. These measurements give you an understanding of staff and process efficiency.
Marketing metrics will give you a better picture of where to spend promotional dollars. You’ll find out which outlets are the most successful and cost-effective in getting new clients and leads.
The main goal of tracking these items is to help you understand your business. Only then can you make better decisions, assess and manage risk, encourage employees to take a proactive approach, and effectively plan for the future.
Proactive management with Provident
At Provident CPA & Business Advisors, we believe that what is measured is better managed. Visibility is crucial to successful business growth and sustainability, and we give you the tools to collect these metrics.
Our Proactive Management Systems approach is made up of two key components:
- Accounting. We start by overseeing your accounting process, making sure you’re gathering all the information you need, and doing it efficiently.
- Greater visibility. We then help you understand what those accounting numbers mean in your business’s big picture. You’ll view your financial metrics in a simple, automated dashboard, so you know what’s going on and can plan ahead.
Provident is committed to helping you improve and streamline your business. Contact our team of professionals today to learn more about our Proactive Management Systems and growth and profit improvement services.