As the founder of a business, you likely began your journey with a determination to solve a problem, combined with a vision of how you could do it that you turned into something tangible.
Your idea and strategy will have been fluid, changing almost daily, and you’ll have kept this strategy firmly in your head as you steered your way through the unclear and complicated start up waters.
You’ll have communicated your vision with early supporters and funders, but if you are like other founders your strategy probably didn’t settle and solidify for a long time. Your agility was one of your superpowers.
This serves you well, until it doesn’t.
What once was a superpower, can, if not nurtured properly, become a liability.
As your team and revenue grows, it becomes ever more important to transition from a loose, internalised strategy to one which is transparent and clearly communicated across the business that can act as a beacon to guide and align your team.
Keep the strategy alive
Sharing your strategy with your team ensures that everyone understands your vision, your goals and how you plan to get there. It means they can see clearly how they will play their part, making each team member a useful and productive part of the business.
When your strategy is clearly communicated with your team, people are empowered to work autonomously towards the same goal. If you keep the strategy in your head, people are unable to take responsibility for their work which leaves you under continual pressure to know, and do, everything.
You may fear that setting out your strategy will reduce your ability to act and respond in a fully agile way. This couldn’t be further from the truth. When your strategy is clear, and clearly communicated, it becomes easy to adapt and adjust your actions. Your whole strategy could change (aka pivot!) as and when required.
Winning teams learn and aren’t afraid to rapidly change what isn’t working. Engaging your team in developing and refining your strategy increases the different perspectives and ideas you can access. Insights from across your team will help you to learn more quickly what is and isn’t working and put a better answer in place.
So, how do founders know if their strategy is working?
If you keep your strategy in your head, you have almost no way of knowing if it is effective or not.
When your strategy is clear and clearly communicated, the next step is to decide what counts as ‘working’ and how you will measure that.
This can be a scary step, as it means clarifying and quantifying what success looks like. Without that clarity, however, focus is much harder.
Alongside your ‘why’ (or qualitative definition), it is powerful to quantify what that looks like in measurable terms throughout your organisation. This is done through performance metrics.
When implemented well, metrics are invaluable in aligning and focusing your team on the outcomes needed to deliver your most important goals and make your vision a reality.
Done badly, and metrics can become a drain, a box-ticking exercise that adds little value and results in staff disengagement.
Effective leaders develop and embed a clear set of metrics that align financial and operational targets across their teams. Although here at Artemis Clarke we focus on finance, we understand that financial performance is the result of operational activity.
Wherever possible metrics should get behind high level financial metrics to the underlying activity that drives the results you are looking for, whether financial or other.
For example, a very common financial metric for a growing SaaS business is MRR (Monthly Recurring Revenue). Many founders track this is a key strategy for most SaaS businesses.
However, what drives MRR growth?
Several factors, such as driving higher awareness of your business, identifying potential customers, converting potential customers to actual customers, onboarding new customers well, keeping new customers on the platform, driving greater time and usage of your SaaS offer, measuring and communicating ROI…. The list can be very long!
These are a selection of the operational activities that will drive the high-level financial outcome you seek of higher MRR. All of these can be measured and tracked with well-designed metrics and could form a portfolio of measures that will align teams across your organisation on achieving your goal of growing MRR.
There are many metrics you could consider for your business depending on your sector, business model and strategy. The first step in using metrics effectively to align activity and drive growth is to ensure that you move from the strategy that lives in your head to a clearly defined and communicated strategy that your whole team understands.
Once your strategy is out there, and you’ve decided how to measure its success, you’ll be better able to make informed decisions about the future direction of your business.
To learn more about how to decide which metrics to measure in your SAAS business, as well as what to do with your KPI data, join our webinar on 24 October when Artemis Clarke founder Kate Clarke will be joined by Fractional CFO Myles Arnott and Co-founder of Roda Matt Spry to discuss how metrics can be used to align your team and turbocharge your growth.
