Business Systems and Processes.

The Systems Thinker Blog

Numbers are the Language of Business Improvement!

It is my experience that most small-business owners don’t fully understand the importance of numbers in running their business. Many do not carefully review their financial statements or even know exactly what the numbers mean. It is common for accountants to provide monthly financial information long after the reporting period. By that time, the numbers are cold and of little value.

If this describes your situation, it’s time to make changes!

Business consultant Peter Drucker says, “You cannot manage what you cannot measure.” To which, Michael Dell of Dell Computers adds, “Anything that can be measured can be improved.”

Lagging Indicators

Financial outcomes, such as a Profit and Loss Statement, provide “lagging” indicators of organization performance because they report past results that cannot be changed. They include such things as revenue, expenses, cash flow, profit, return on investment, and other measures. These numbers reveal strengths and weaknesses, performance trends, break-even points, and other intelligence for decision-making and problem-solving.

This historical data is a valuable “report card” of overall business performance; it is important to owners, shareholders, investors, and bankers.Crunch the Numbers

Leading Indicators

“Leading” indicators are the measures of your internal systems and processes that lead to financial results. They are happening in real-time, and you can change or improve them as you go. For example, they might include the number of sales leads generated by marketing campaigns, the number of orders processed or services performed in a day, and so forth.

Here are five types of business measures that are important to you, with some questions to get you thinking:

  1. Efficiency Measures – How many person-hours does it take to make a product? How long is the lead-time between receipt of an order and shipping? How many deliveries do you make in a day? How many customers do you get per advertising dollars spent?
  2. Quality Measures – What is the rate of returned merchandise or service callbacks? How many defects are there per total items produced? What is the average cost to service your product warranties?
  3. Customer Satisfaction Measures – How many new customers do you add per week? What is the frequency of repeat orders, complaints, or referrals? What do satisfaction survey results tell you?
  4. Employee Skills and Satisfaction Measures – How many hours of employee training are performed per month? What percent of employees are certified? What is your rate of absenteeism, or employee turnover?
  5. Innovation and Improvement Measures – What percent of the budget goes to developing new products or services? What percent of sales come from new products? How many suggestions for improvement do employees submit each month? How many are implemented?

Leading indicators are important because the earlier your measurement system reveals a problem or diminished performance, the sooner corrections can be made.

Speak “Numbers”

In summary, measure your core business systems and constantly improve them for better results. At the end of the month, you will get a financial statement telling you the outcome of your effort. Next month, try to do even better!

Don’t get bogged down with all the possibilities for business measurement. Focus on the few key numbers that drive the “economic engine” of your company.

Ultimately, you want to create an organizational culture where everyone speaks “numbers”–the language of improvement. In the best businesses, “Results Rule!” (Randy Pennington).

Related Article:
Manage By the Numbers

*****Special Alert: My Retirement is Your Gain*****

To give back to the entrepreneurial community, I HAVE DECIDED TO GIVE AWAY MY VALUABLE SYSTEMS-BUILDING SOFTWARE, ecOURSE, AND OTHER INFORMATION ABSOLUTELY FREE. By filling out the form on this page, you will go directly to a download page. This is not hype. There is no catch. You will receive a software product and a “college equivalent” eCourse on how to develop effective business systems and processes. Customers have been paying for this software and eCourse for fourteen years (see What Cutomers Are Saying).

I will show you how to eliminate business frustrations and make more money by creating remarkable systems and processes that boost customer loyalty, profitability and growth. The application of these strategies has proven to be of great worth for owners of many small and mid-size businesses. Put me to the test!

You will learn the following, and much more:

  • How to become a Systems Thinker and raise your business I.Q. by 80 points—OVERNIGHT.
  • What six elements are found in every great business system.
  • How you can remove waste and inefficiency, and build a results-driven organization.
  • Why good systems and processes are the essential ingredient to start, grow, fix or franchise (replicate) your business.

You have nothing to lose and everything to gain. I will not be trying to sell you because you are getting everything for FREE, much more than I have described here. I won’t be contacting you; however, you can contact me for help with the software or your business at any time. Please browse around my website. If you have any questions, email me, Ron Carroll, at

I hope you enjoy and benefit from this FREE offer. It was a labor of love for me to develop. Becoming a Systems Thinker and using the Box Theory™ methodology will be one of the best decisions you have ever made.

I’ll be cheering you on from my quiet fishing hole in the mountains of Utah.

I want to learn how to create remarkable business systems …

Just Retired
Gone Fishing
Your Lucky Day

It's time for me to focus on other things. Many hours and dollars have gone into my software and written materials over the last fourteen years. Now it's time to give back. This is not a gimmick. There is nothing to buy. I give it all to you for free. If you use the software and apply the principles, you can create a remarkable company. See Below. Have fun!

Turn Your Business Into Money-Making Systems!

Get Free Information for Creating Better Business Systems and Processes
Welcome to the #1 website for helping owners of small to midsize businesses create customer-pleasing, waste-removing, profit-boosting business systems and processes.

Michael Gerber, "E-Myth"

Michael Gerber

"Organize around business functions, not people. Build systems within each business function. Let systems run the business and people run the systems. People come and go but the systems remain constant."

W. Edwards Deming, Total Quality Management

W. Edwards Deming

"If you can't describe what you are doing as a process, you don't know what you're doing. . . . 94% of all failure is a result of the system, not people."