I refer to one of my core service lines as “Eagle Eye” since I’ve found that selecting the right priorities to work on is half the battle (if not more) to succeeding in business. After all, what’s the point of working long, tireless hours on the wrong priorities? Formulating strategy is rarely the problem; instead, 80% of the time, the problem is one of the following: 1) You don’t have time to work on the critical priorities. Perhaps you are not selecting well and/or you have too many priorities…. 2) You don’t know how you’re doing on those critical few priorities.
How can you have an eagle eye to pick out priorities and actions required to thrive if you don’t know how you are performing? You can’t. Thus, metrics are vital to success. A few keys to leveraging metrics to drive bottom line business results include: 1) Track only the essential metrics. 2) Understand trends. 3) Focus on corrective action.
- Track only the essential metrics:
- Just tracking metrics is useless; however, tracking and using the “right” metrics is a secret to success. How many of us have metrics and spreadsheets being tracked that we do not use or do not understand? I venture to guess ALL of us. Why? It is someone’s job to track the metrics.
- It might seem radical to consider stopping all of your metrics for a day or a week. Give it a try. Find out which are missed. Are they missed because they are important to success? Put only the critical metrics back in place. Can you see whether you are on track with key objectives by the metrics you have in place? If not, you might need to add a few. Once you’re finished with this exercise, you will undoubtedly have fewer metrics but you’ll be on top of how your business is performing.
- Understand trends:
- Even the “right” metrics are useless if you don’t understand how you are performing over time. A single point in time could be a huge success, a horrible failure or average performance yet you’d have no idea which without a plan and trend data. I’ve recently become aware of the term “bowling chart” which is the lean terminology for tracking performance on policy deployment objectives. To me, it is a trend of key metrics.
- When I think back to the clients where we’ve achieved significant business performance improvement, metrics have always been an essential piece of the puzzle. What is the plan? How did we perform? (And let’s NOT wait too long to know!) How do we know whether especially good or bad performance was an outlier? Where should we focus resources? Which action plans should we follow? Impossible to know until you track performance trends.
- Focus on corrective action:
- Let’s say you have the “right” metrics and have trending information; unfortunately, they can still be useless if you don’t DO anything with the information. It might seem obvious that corrective action must follow; however, I find it is rarely done.
- For example, one of my clients had to reduce past due and was able to trace the bottleneck to one of their operations. The next step would be to devise a corrective action to resolve the bottleneck and bring past due down towards 0 to rapidly to resolve customer concerns. So, why didn’t that happen quickly? Corrective action requires the hard work of blocking and tackling and often is unpopular to boot. In my experience, figuring out the appropriate corrective action isn’t rocket science; however, implementation can seem like rocket science. It requires confronting reality, addressing issues upfront, and excellence in execution – a rarity in my view.
- My clients who take metrics to heart and ensure they are integrated into the culture succeed. My client who don’t flounder! Which will you be?