CEO BrainFood

015 Do You Know Your Critical Number?

Episode Summary

Welcome to CEO Brain Food, a show aimed at providing key insights, fresh perspectives, and proven tools that CEOs can apply to build enterprise value, generate higher profits and develop the talent needed to succeed in their businesses. In this episode of CEO Brain Food, Michael speaks to one of the most important aspects of running a business: knowing your critical number. He highlights the importance of distinguishing between which numbers are important and which numbers are critical. Michael breaks down the process of identifying the critical number, forecasting that number out, and looking at the drivers that are associated with that number. Finally, Michael shares insights on how engaging and educating employees can help support and grow businesses exponentially.

Episode Notes

01:02 – Introducing today’s topic: Do You Know Your Critical Number?

02:17 – Michael speaks to his own experience working with his CFO on his critical number

03:48 – The Mariano Rivera example

05:30 – The value of historical data

07:30 – Identifying the critical number

10:02 – Engaging your team to achieve your critical number

11:17 – The Great Game of Business

13:05 – Other strategies for engaging your people

14:00 – The importance of educating your people on the business

17:50 – Michael leaves the audience with a quote from Jack Stack

18:42 – Michael poses a self-inquiry questions to the listeners

19:17 – Michael teases the topic of the next episode of CEO Brain Food

19:46 – Where to find Michael’s Functional Team Scorecard


“We have numbers available to us at a moment’s notice, the tip of our fingers. Numbers are everywhere, and leaders use them in tracking progress and making important decisions.” (03:37)

“With so much information, we tend to lose focus and it just is all foggy and it runs together.” (06:44)

“I like to think of the critical number as the one number that represents the important variable we have to get right in order for our organization to succeed.” (07:40)

“A great way to engage your people is to connect the data that you’ve got to a benefit such as a bonus, or some type of reward, or even equity in the form of stock and stock options.” (13:05)

“At ‘Great Game,’ the critical number is defined as an operational or financial number 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.” (17:19)

“People support what they help create.” (17:57)


Michael’s LinkedIn

Michael’s Website

The Functional Team Scorecard

Jim Collins' Website

Four Characteristics of a Strong Critical Number


Get In The Game: How To Create Rapid Financial Results And Lasting Cultural Change

The Great Game of Business, Expanded and Updated: The Only Sensible Way to Run a Company

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