Just as an automobile needs a number of dials on the dashboard & also needs to have its tyre pressures checked periodically, a business needs a number of “dials” to have control. But the number is small. 5 such “gauges” will tell how a business is doing & whether it is moving in the right direction.

1. The first true measurement of a company is its standing in its markets. Is market standing going up or going down? And is the improvement in the right markets.

A company also needs to know how its products or services are doing in respect to market share  compared with alternatives of customer satisfaction.

2. The second “dial” on a company’s “instrument board” measures innovative performance. Is the company’s achievement as a successful innovator in its markets equal to its market standing?

3. The third is productivity. Ideally, the productivity should increase steadily.

4. The 4th dial shows liquidity & cash flow. It is old wisdom that a business can run without profits for long years provided it has adequate cash flow. The opposite is not true. Liquidity is easy to measure & highly predictable. An ordinary cash-flow is usually all that is needed to identify cash flows & cash needs.

5. The final “dial” should measure business profitability.

These measurements of performance give control. They should regularly be on the desk of senior team members.