The Critical Number
So Slack went down last week - what better time to start that revenue growth resource that I was planning, right? Let’s start with the Critical Number: what it is, why it matters, and how to put it into practice for your business.
The concept of the Critical Number had a significant impact on the tremendous growth we experienced in 2020 - despite the pandemic. So, what is it? The Critical Number comes from the Great Game of Business, an open-book management philosophy. It’s the one number that if you fail to achieve or exceed it, there would be a drastic negative impact on your business. Where most organizations make the mistake with Critical Numbers is they look too much towards their Top-Line or Bottom-Line Revenue or Sales goals vs having the Critical Number focus on the activities required to reach those Top-Line and Bottom-Line goals.
You could probably use an analogy, right?
Well, we all want white, healthy teeth. That’s the goal. The Critical Number, however, is making sure you brush 2-3 times daily. Brushing 2-3 times a day is clear, easy to track, and easy to manage. The white teeth are the destination, much like the larger annual goals of a business. In 2021, set out to find your Critical Number and you’ll be amazed at the results. As you begin this climb, keep these best practices in mind:
Best Practices for Critical Numbers
1. Critical Numbers are goals, but goals are not necessarily Critical Numbers.
Here are a few thought starters for Critical Numbers in Revenue Departments that are focused on activities:
- Sending X Number of New Business Proposals
- Holding Y Number of Prospect Meetings
- Speaking and Presenting at 12 Industry Conferences
2. Critical Numbers should be visible to the entire company.
Collaboration across departments has always been important, but even more so now that many of us are working remotely. It’s been great to see how the various departments in our own organization really rallied around each other’s Critical Number.
3. Report on your Critical Number weekly, not monthly.
Since Critical Numbers are focused on the activities required to reach the larger top and bottom-line goals, they can and should be reported on weekly. This helps reinforce the importance of the goal as well as celebrate the success and/or address a major challenge if the goals start to slip away.
I’m happy to share more about Critical Numbers and other great resources from the Great Game of Business. Feel free to reach out. Oh, and brush those teeth!