Profitability Trends

When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.

D. Brown Management Profile Picture
Share

When you are looking at your scoreboard, remember that industry average benchmarks and single points in time only tell part of the story.

Scoreboard: Invoice and Graph representing Company Profitability and Trends.

Just like physical training, what really matters for your personal health is that you are consistently improving.

  • Graph your key metrics over the last five years and look for relationships.
      
  • Analyze your data and look for outliers to help the trends make more sense. For example, did you have one super good or bad job in a year that completely skewed the metrics?

  • Be cautious not to over-rationalize “outliers.” If you have a bad job every year, remember that is more likely to be part of the trend rather than due to an outlier. For example, Motorola had something like 24 consecutive quarters of “one-time” expenses. If they occur that consistently, they are regular expenses and not one-time expenses. Also, Motorola is no longer around. 
     
  • What do those metric trends look like if you project them another 2-3 years into the future?

  • Which metrics are trending in the right direction?  

  • Which metrics can you improve?  How?  


Want to talk about it? Contact us for a conversation.




Reflections on Learning to Ski - 8 Core Principles for Learning a Completely New Skill
While I am learning every day, it has been a very long time since I’ve put myself in the position of learning something completely new. That has now changed, as over the last couple of weeks of 2019, I learned to ski.
Jeff Bezos - All Overnight Success Takes About 10 Years
Do you have the stamina for success? Being successful in anything worth having--relationships, careers, companies, health, and life in general--requires the daily discipline of working deliberately toward your goals.
CM-at-Risk: The Preferred Delivery Method of the Top 400 Largest Contractors
Construction Manager-at-Risk (CMAR) is the preferred project delivery method for the ENR Top 400 contractors and the project owners they serve.