The Curate’s Egg…managing Company performance

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Are you in control of your business?

With the proliferation of data from automated feeds into the Boardroom Report, Executives have an opportunity to manage their business and make decisions with the facts at hand. The challenge however is that the availability of measures creates a counter-problem by the pure volume of insight. The Dashboard approach which is used in many companies, takes a sample of metrics and measures and presents them as beautiful arrays of BRAG indicators, Graph’s, Spider-graphs and Tables, which compile to ‘The Month Review Pack’, probably delivered a day before the Executive Review or in a worse scenario, presented on the day.

The Executive then starts to reason. Financial one’s are to some degree the easiest. ‘Actuals, Forecast, Outlook and Trending’, multiplied by views of Revenue, Order Book, Sales, Profit, Cash-flow, Expense and EBITDA or PBIT. Getting complex but a bit like singing the national anthem, it subconsciously fits together as you are doing it.

Then the challenge comes. Business Units start to provide their views of the business in an array of styles; Sales, Marketing, Customer Services, HR, Finance, Operations… What started as the hope of a simple dashboard, delivers a Christmas Tree-like book, with Blue, Red, Amber and Green status lights, with Graph Lines for tinsel and Pie Charts for baubles. Very pretty, but when you add to the complexity that a RED ‘may not be bad’ as it is trending in the right direction and a GREEN ‘could be bad’ as it is on a small percentage of the business mix.

Having lots of data can be as damaging as having no data.

It is no wonder that unless you are having a really successful time in all your markets, the Review will either be a contentious one or partly overlooked.

So, what can you do about Measures and Metrics to make more sense and ensure that they can be reviewed? You need to work together as a Management Team and dedicate some quality time to agree Metrics that represent your focus with a clear definition that the operational source can confirm.

These needs to include:

  • Financial Performance
  • Market and Customer Performance
  • Critical Operating Metrics
  • Strategic Metrics
  • Change Measures

Don’t accept measures just because you can get them.

Think about what the company is trying to achieve. Use a good balance of Lag and Lead indicators. I think of them as ‘have we achieved objectives’ and ‘Are we going in the right direction?

I’ll cover other areas of Scorecards and Alignment in future posts.  I will also cover data quality and efficacy later too.

So, the challenge when viewing your next Executive Pack, ask yourself, “are we really managing our business with the information that we review?”

About David Dugdale
Business Transformation Consultant

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