If you have kids between 7th and 10th grades, you should know about The College Board‘s The Official SAT Question of the Day. It provides a daily question that is a fun and challenging way to learn about the types of questions asked on the SAT and how to answer them. As a parent, you will also be challenged (and happy that you don’t have to go through that process again!).
The question on Saturday, May 30th made me think about how important metrics (measuring your activities) are to a successful new business process.
Here’s the question that was asked:
In the figure to the left, “the large rectangle is divided into six identical small squares. If the perimeter of the large rectangle is 30, what is the perimeter of one of the small squares?” And your choices of answers:
To create the new business metaphor, think of each small square representing one of the activities of a well-developed new business program. They might be:
- Direct marketing
- Networking with colleagues, past clients, search consultants, and friends of the firm
- Responding to RFPs
- Organic growth
- Agency public relations
If the perimeter of each small square represents the sum of the activities in the square, the individual activities you might want to measure for “responding to RFPs” might be:
- Number and average number received per month
- Number and average number of man-hours required to complete each
- Average and total number of days from receipt to submission
- Cost and average cost to complete each
- Ratio of “on to next round” divided by the number of submissions
- ROI: Pre-tax profit from wins that involved an RFP divided by total cost of RFP submissions
I’m sure you can add other metrics to the above list. If you break down each of the 6 major new business activities into what needs to be measured for each one, and then measure and graph trends over time, you’ll soon know whether your new business process is improving, or not. With that information, you will be able to make the right decisions to improve your process.
So, the answer to the SAT question is 12. Whether you got it right or not, hopefully you now see how weekly (best) or monthly (at the least) measurement of your new business activities will improve your ad agency’s new business process.
In any case, good luck with your daily Question!