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Republished with permission from the author.
Think of the last time you missed a sports game that you wanted to watch. Maybe you were at a wedding and missed an NFL playoff game with your favorite sports team, or perhaps you just missed your kid’s soccer game because you were out of town on business.
Either way, what’s the first question that comes to mind after the game is over? I bet it was: “What was the score?” Why do we always ask this question when it comes to sports?
The story numbers tell
We ask because the score tells us a story. In football, if someone told you that it was 30-7, you would immediately form an idea about how the game went. The other team’s quarterback got injured, or the winning team dominated with interceptions.
Maybe it was a really close game, 27-24, and you immediately have another idea about how the game went. The teams were neck and neck until one missed a field goal. You might not know the specifics, but the number gives you instant clarity about how the game unfolded. The same thing is true in business. We all need our scoreboards.
Our score — good or bad — tells us how to win, helps the people in our organization know what they need to do to win, and provides a clear course of action based on what the score is. Again, the football sports analogy works here.
If you go into half-time and you’re up by 23 points, the conversation is very different than if you’re down by three points. Everything about the plan changes depending on what the score is — you’re either pushing defense or offense, you change the plays you call, and you might even switch up the players on the field.
The entire game plan changes based on the story the numbers tell you, and you start leading from a very different place.
What do you really know?
Here’s the funny thing, though, so often we think we know our numbers. We may think that we know them inside and out. As business owners, we pride ourselves on making numbers work to turn a profit.
But the reality for most people is that we’re not as clear on our numbers as we think we are. Sure, we have a general idea. But a general idea isn’t good enough when you’re building and leading an organization.
A few years ago, I asked myself, “Do I really, really know my numbers for all my businesses?” My ego said, “Yes, of course, I do.” But when I relaxed behind my ego and paused just to listen, I heard a different answer. I realized I don’t know the numbers are well as I thought I did.
Sure, I know a lot of our company’s numbers, but what I really needed to do was spend time reevaluating our numbers to make sure that:
- I understood the story the numbers were telling and was setting the plan and vision accordingly
- I was focusing on the best numbers that would tell the most accurate story
It’s impossible to plan when you are not totally clear on all your numbers. If the numbers aren’t complete, the story you’re telling yourself isn’t complete either.
The same is true in life. How often do people avoid hopping on the scale? It happens all the time, right? And why do we avoid it? Because we know numbers don’t lie.
Numbers aren’t emotional (though we might feel emotional about them); they are hard facts. We can’t talk our way out of a number. Once we know the number, we must make a choice — keep being the same person or change and become a new person.
I can speak to this firsthand because I did this for years before getting serious about losing weight. When I decided to hop on the scale, I was also committing to a new way of living. It can be hard to look at the number, but it can change who you are forever when you do.
In business, we also come up with a whole bunch of reasons we don’t have to look at our numbers, and often, we’ve hired people to know them for us (whether it be an accountant, operations manager or CFO).
But if we’re not looking at our numbers square in the face daily or at least weekly, we don’t know the whole story, and our business suffers as a result. When we look at the numbers frequently, we gain so much more clarity about leading our business, our team, and the next steps we need to take.
What numbers should you know?
So, what numbers should you be looking at for your real estate business? Here’s what our team tracks on a daily, weekly, monthly, quarterly, and annually for all of our teams:
- Pendings
- Listings
- Agent count
- Retention rate
- Sales volume
- Gross commission income
- Profit and profit margin
- Expenses
- Number of contacts
- Number of appointments (with clients and with agent recruits)
Once you know what numbers you want to track, it’s essential to create a system around your numbers. Whether it’s your bookkeeper giving weekly reports, your sales dashboard creating an automatic report, or another team member compiling the data for you to review — get those numbers, and make sure you understand the story they are telling you.
This information is critical to help drive the company forward and even understand what activities you need to take each day.
For example, our team sends out a scoreboard to all of our leadership team and agents with the relevant data at the end of every day, so we have a real-time update on what’s happening in the business.
Here’s the big takeaway, though: Numbers shouldn’t make you feel bad about yourself if you don’t like what you see. Even if you’ve been avoiding them, numbers are data. And data provides clarity, and clarity offers power and speed in business and life.
Whether it’s out of control operational costs, massive debt you’ve accumulated, your best sales quarter ever, or an uncomfortable number on the scale, stay neutral. It’s just as dangerous to get overly excited and confident from a significant increase in revenue as it is to become depressed and paralyzed by a considerable loss.
The more you can step back and let go of any emotions or attachment to the number and look at it as pure information, the faster you’ll be able to make a sound strategic decision for your organization. This is where your growth as a leader happens. Numbers tell the truth. And the truth sets you free.
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Adam Hergenrother is the founder and CEO of Adam Hergenrother Companies
