Webster’s on-line dictionary defines a standard as “a level of quality, achievement, etc. that is considered acceptable or desirable”. Each of us, as individuals, has a certain level of standard to which we strive to hold ourselves in many areas of our lives. Hopefully, these standards are high level, important priorities that cause us to get up each day and compete, knowing if we achieve our standards, we will be more effective, productive, and on the road to excellence in the respective areas.
Jack Stack, author of The Great Game of Business, says companies need standards. Stack says, “A standard is the number to shoot for in any particular category you are measuring. It may be a ratio. It may be a percentage. It may be an absolute number over a period of time. Whatever the category, you need a number against which you can compare your results and thereby determine how you’re doing (Stack, Kindle e-book, locations 1470-1474).”
If you have not already done so, implement a standard setting system in your company as follows:
- Determine the key numbers and areas of your business that drive profits, cash flow, and value.
- Put a system in place that measures accurately the reality of these key numbers as they now stand.
- Determine the standard numbers in each of these categories that if attained will put your company at or near the top in your industry and help separate you from the competition.
- Communicate to all employees in each area what the standard measurement of excellence is and how it can be measured weekly, monthly, and yearly.
- Put an incentive system in place that rewards your people when these standards are met.
Make sure your company has a measurable standard. Companies that are effective, excellent, and stand out from their competitors have certain key standards in various areas of their business that are known by their employees. Actual results are compared to those standards on a regular basis, and actions are quickly taken to get back to standard if off track.
*Stack, Jack, (1992, 2013), The Great Game of Business