Critical Number

I’ve recently been getting re-energized about The Great Game of Business. It’s the story of a company that turned itself around in the 1980’s by using an approach to management through something called ‘open-book management‘. I won’t describe it all here because there many great articles already doing that.

One important concept to open book management is the Critical Number. The Critical Number is one metric, either operational or financial, that represents a weakness or vulnerability that, if not addressed and corrected, will negatively impact the overall performance and long-term security of the business. The Critical Number can change from year to year, but it usually doesn’t change too quickly.

Usually this is thought about in the context of business, but it can also apply in other contexts. For example, someone who is looking for a new job or career might decide their Critical Number is how many job applications they submit. For someone who wants to be the first seat violinist in the city orchestra, their Critical Number might be how many hours a day they practice. Baseball players are measured on a huge swath of statistics but a Critical Number for winning might be on-base percentage.

What gets measured, gets improved.

Author: johnny88keys

Optimistic idea enabler mindfully seeking rapture

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