A Better Way to Measure Company Growth

By James B. Hangstefer

What is the best way to grow your company or business? We all understand and value the creation of a company goal, but how many of us can claim to have a strategic plan to get ourselves there? Strategic planning allows you to carve out your organization’s path and develop contingency plans to prepare for unexpected business events in order to assure strong business development. Strategize and energize your organization’s route to success.

The underlying purpose of every business enterprise is to consistently and concurrently create growth in value for its customers, employees and owners. This must happen year-in and year-out or a company will face serious future problems. In today's fast-paced market environment, .this risk is magnified for those companies that remain wedded to yesterday's ideas and practices. To build growth momentum in any business, ongoing, important innovation that strengthens the company is essential. New business models and performance metrics are necessary to deal with the opportunities and problems emerging from changing conditions. Traditional financial reports are woefully inadequate to guide internal decision-making toward company growth.

There is a new metric to measure company performance -- Revenue Margin (REM). It looks at company-growth momentum. REM is one of a family of financial and operational metrics called Momentum Indicators, that analyzes overall company effectiveness in producing long-term growth. The family measures company performance using nineteen specific indicators in five areas: Market Position Strength, Organizational Vitality, Productivity Gain, Financial Performance, and Stakeholder Value Produced. Revenue Margin is the starting point in putting Momentum Indicators to work as it is easy to implement and provides important insight on performance trends in a company's Market Position Strength.

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