The Hidden Cost of Incomplete KPIs: How Partial Visibility Sabotages Executive Decision-Making

Ever feel like your business is running you instead of the other way around? I've been there, too. Many business owners chase revenue and growth, only to find out later they've unintentionally built risk into their companies. It happened to a friend of mine—let's call him Bob. His company looked successful on paper, hitting all the revenue targets, but when it came time to sell, he discovered a valuation gap of over $35 million. Ouch.

The problem? He'd ignored valuation-driving metrics. One critical area was concentration of revenue—in his case, too much revenue depended on a single customer. As revenue grew, so did this hidden risk. Bob ended up working three extra years just to fix this issue.

That's why I've become such an advocate for a valuation-first approach. Instead of just chasing revenue, focus on metrics that drive real, sustainable value. Things like churn rate, employee engagement, EBITDA (or cash burn rate for startups), and pipeline health. These metrics don't just protect your business—they actively increase its worth.

Think about it like this: if you're climbing a mountain, you need to not only reach the peak but also ensure you don't slip along the way. Valuation-driving metrics are your safety ropes, keeping your business stable and secure as you scale.

So, where should you start? Take a quick assessment of your own business. How concentrated is your revenue? How satisfied are your customers and employees? Are you tracking the right KPIs to grow safely and sustainably?

Building a business isn't just about hitting goals—it's about achieving them in the right way. Trust me, your future self (and valuation) will thank you.