It's Time for a Business Performance CheckupFEATURING GUEST CONTRIBUTOR: George Brockman, CEO & Management Consultant, Radiant Professional Services, LLC
Just in time for the big 5-0, I had my regular checkup with my doctor. She consulted the chart, and with a change of expression I could swear was a grin at my expense as she told me it was time for my colonoscopy. Drat! I started to think that as more time passes, the more things I will need checked and measured. Is this a sign of my age, that older people have increasing demands for checkups and measures? Then I remembered those trips to the pediatrician where my children were weighed, measured and tested to identify their health and progress. We learn the percentile of growth, and the warning indicators that something may need close-monitoring along the way. The reality is that lab tests, weighing, measuring, etc. are not a part of growing old. All of these things may change in some ways, but they have been and will always be there.
Your Business Performance Has Vital Signs, TooSo it is with business; measurement and oversight are constants, but the 'what' and 'how' of monitoring business performance will change as the business’ life cycle advances. For example, a new organization (like a new born baby) starts with its conception and birth into existence. Right off the bat, you try to get the business off of the constant feeding from startup investments, and onto its own feet and revenue. To get there, you have growth objectives to track against, ensuring your business performance matures at a rate that is both healthy and sustainable. Throughout the life of the organization, naturally, you hope it's growing and developing, despite the ever-changing challenges. Does the company become overstaffed or anemic in revenue? Are there toxic attitudes in the workplace preventing healthy business performance? Regardless of where your organization lies in its life cycle, good measures help ensure growth by identifying its progress and threats when they occur. One of my clients recently dropped a metric – a “satisfaction” survey – because they realized nothing was being done with the data and that the questions weren't capturing anything that could lead to actions and improvement. Collecting invalid or meaningless data risked souring their organization's morale, while not benefiting the team. The leadership team is now revisiting what they want to accomplish and working to find a better measure.
How Do You Measure Business Performance?One Golden Yardstick Do you measure business performance using a One–Measure approach? It's like driving along the interstate and as long as no long warning lights come on, you are hopeful that everything is okay. Your “Check Engine” light may be a balance sheet, sales volumes or productivity report. And while all these measures are necessary, they are one-dimensional and are all indicators of how your company did (past tense) and told you nothing about how you will do in the (short or long term) future. Full Dashboard An improvement over the one-yardstick approach is to consider a more rounded collection of business performance measures. Tools such as the balanced scorecard, strategy map, and capabilities gap, are all part of a suite of tools that give you more visibility into your organization. Now we look at the full panel of diagnostics and gain insight into both how healthy you are, and where any potential problems may be lurking. As the organization continues to mature and adapt, having this in a consolidated view, such as an executive dashboard, helps to keep the focus on the most important business performance metrics. AchieveIt’s dashboard can provide the critical business performance measures for your organization and map those back to your strategic plan. As your organization matures, so can the metrics being monitored. In fact, each team member can have their own dashboard to monitor those that are in their area of focus.
Quick Tips to Healthy Business Performance
- Build your vision. Without a clear vision, you are setting a course without understanding where you want to go. Rarely does the Christopher Columbus approach to business pay off (“Just head west until we hit land. That will be where we make our fortune”).
- Build your path. Once the destination is understood, it is time to define the path your team will take to reach that destination (see step 1). Identify the efforts that will move everyone in the right direction. This is your strategy for meeting the vision.
- Identify the critical measures. There are seemingly thousands of business performance measures that can be made in an organization. Picking the right ones is as important as clearly mapping the vision and strategy. Some tips to keep in mind are:
- Make it relevant. Be sure what you're measuring is relevant for what needs to be accomplished. That is, ensure that the numbers behind your business performance metrics are ones that gets you closer to where you want to be. Neither timesheets, nor productivity alone will get your there. Customer opinion, throughput, and capacity can be telling.
- Measure processes. Take the microscope off of people and put it on the actual work being done. Is the process too slow or not moving the work in the right direction?
- Include your team in the process. Employees can accidentally or deliberately thwart the value of measures in a variety of ways. For example, a sales person who is given a sales quota may hold back sales if they have met their quota for this period, in order to save it for the next. This not only affects the numbers collected, but also threatens the revenue stream.
- Keep them close. Measure collection for business performance should be as close to the source of the work as possible.
- Use the best tools to keep the information in front of the decision makers and share the results candidly with the team. Collaborate on the problems and find fixes as a team that can overcome any problems.