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Over time, a company's value becomes a function of both growth and cashflow. So in addition to looking at year-over-year growth, you should be looking to these three metrics to drive long-term value: 1. What is your predictability metric? Focus on growth and growth alone is always a temporary strategy. Predictability.
When the staff conversation turns to operating margins, cashflow, inventory, or revenue, does the CHRO tune out? You should be able to expect your CHRO to offer solutions for improving any of your business metrics through employee alignment and engagement. Your head of HR is hesitant to be accountable for meaningful metrics.
Yesterday’s core inventory metrics — inventory turnover (cost of goods ÷ average inventory) and inventory GMROI (gross margin ÷ inventory cost) — fail to provide the essential information that managers need to avoid the twin problems of missing critical potential profits while having to write off large tranches of costly inventory.
Depending on the specialism of the organization, this can involve: Cotton swabs Fluid bags Alcohol wipes Sterile and non-sterile gloves Software as a Service (SaaS) A cloud-based platform. Managers use benchmarking to learn from other healthcare organizations and set comparative metrics to hit realistic targets.
So we were aggressive in growth areas, but in a way that always kept an eye on business metrics. We looked at our expense ratios and made decisions on the kind of balance we wanted to have among the different functional areas and about ratios of head count to [cash] burn.
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