So the dreaded metrics..
A question I always ask my clients is do they believe that the metrics they capture add value to their business? More often than not the answer is no.. What I tell them then is that it looks like they are measuring the wrong things..
This is always a point of contention with my clients and people generally see this as a black art to get right, some are lucky and some are not.. It also is a complete mind field for them as they know they should measure things, they read about how they drive performance but then when it comes to implementing, a number of things can happen
- They read about some metrics that sound good and they implement them, but could be of no value to their own unique way of doing things
- They purchase software to help measure things and then they measure everything and then some, missing the key ones
- They hit a brick wall and don’t do anything as they are just so confused with all the contradictory information out there
And I totally get the confusion! When you go online you’ll read all about these fancy jargon buzz words like, business development scorecard metrics,key metrics business model canvas, business analysis metrics, business intelligence metrics that matter, business kpi metrics, business development kpi metrics and the list can go on, it’s pure and utter metric madness!
However there is a simple and effective way of building strong metrics in your business and that starts with business metric definition and what it means to your business and unique way of working.
Like anything you hear me talk about, you have to be continually improving no matter what you are doing, and when it comes to building metrics, its no different.. Everything changes so therefore what you need to measure, and how, will also change and evolve over time, so don’t get complacent thinking you’ve developed metrics recently and think that’s good enough, keep iterating and improving as when you do, they will have a substantial part to play in your business performance.
When you get metrics working for you, as opposed to against you, you will not be dreading the metric sessions as you’ll be looking forward to seeing how they will guide you in what you need to do next to improve many things for your business
- Value for your clients
- Value for your business and
- Value for your team(s)
Metric Madness Video Transcript
Hi Shay Lynch here
Director of Future State.
And today I wanna talk
about metric madness.
Now in a world of data
we have a lot of data.
We can measure practically anything
when it comes to business.
Now we have all these pieces of software
that we can use to measure all
the things in business too.
But the problem with that is like
the whole point of having
metrics in your businesses
is that you wanna measure the key
performance indicators the KPIs.
But when you have all these
systems taking data for you
even if your going collecting
data which is even worse
youre in a situation where
youre measuring EPIs
which is every performance indicators
and the KPIs the key ones get lost
and you dont know where to improve
and therefore once you
start looking at them
you dont pay attention to them.
And it becomes a real
issues for businesses
because they really dont
know which to improve
which drivers and which leavers
to focus on and improve.
So its very important to understand
which are the key performance
indicators in your business.
And then on the other side
the flip side is whether
if you decide that you
dont want to measure
youre just going in doing
whatever you need to do
on a day to day basis and hoping
youll get the same results
as you got before and not
taking any indications
that your work your value
your effort is delivering
or leading to something of
value to your customers.
So one side is too many and on
the other side is no metrics at all.
And I cant actually
tell you which is worse
the lesser evil or the worst evil
of them both because theyre both fine.
And then theres always a
situation where you know
were in a world where
everything is fast moving
at the moment like everything is fast
we have no attention span.
So KPIs are normally in this day
and age focused towards speed.
But what happens when you go too fast
you try and cut corners and you
lead to poor quality so quality reduces.
So how do you get the balance right
between speed and quality?
Because I guarantee you
if you focus on speed
youll do things twice
youll have to do it again.
And then you have the cost of
rework and doing things again.
So sometimes its actually
better to slow down
to speed up and get
things right first time.
And then finally where I see
a lot of issues today is that
people tend to measure after the fact.
In a monthly meeting they
will look at all the metrics
and go well if that was good
that wasnt good but its too late.
You have no influence when you
look at something after the fact.
Yes then you can make improvements
but youve missed say if
thats a month or quarter
youve missed a lot of
time and a lot of capacity
where you could have
improved things okay.
So after the fact is good
just at a high level
but it means nothing on the
day to day activities
within your business right.
So with that I just want to
talk about some principles that
you can go walk away with
today to help you define
what are the key performance indicators
you should focus on in your business okay.
So the first thing I always talk about is
what is the value of the metric
that youre trying to implement?
Whats it leading to?
Is it operational efficiencies?
Is it operational improvements
supplier performance?
Or is it on the customer side of things
whether its MPS whether
its customer conversions
or whether its customer satisfaction
or service delivery or experience
there are a number of different criteria
that you can set into different
areas of your business.
What is the value and then within that
what is the specific metric
you are going to measure okay?
And then then you need to
ask yourself the question is
well what action will
it drive me to do right?
Because theres no point
in measuring something
if youre not gonna take action
after youve measured it.
So with that while sometimes
after the fact is not great
we need to talk about real time metrics
things that you can change on the fly.
And Im talking directly real time
but day to day businesses
like what can you do tomorrow
that will improve what youve done today.
So its very important to have
real time metrics in your business.
And when you measure it
what are you gonna do
after to improve it?
Or if its falling behind
how do you get it back
to where it needs to be to
your target level okay?
Because metrics drive behaviors.
If youre measuring the wrong
thing youre measuring
youre improving the wrong thing.
So measuring the right things will drive
the right behaviors within your business.
So when you have these metrics defined
depending on how big or
small your business is
it may be worth looking
at a pilot you know
doing a pilot seeing how it
adds value to your business.
Now pilots are great
because you can take it
a little bit outside of
your normal operation
day to day stuff but just see
is the metric adding value.
Is it driving the right behaviors?
Are you taking the right actions okay?
And then once you pilot
then you can review?
Well even regardless of
whether you do a pilot
first of all find the value
if its a valuable pilot
but then after youve
done a period of time
like using the metric
you have three options.
Do you want to keep keep it as is?
Is it performing as you
as it intended to be
as you thought it would do?
So if it is great keep it.
Well do you think it was
good and then you may after
measuring some time you may
say well you know what
if we measure this it
could improve it slightly.
So you may want to tweak it a small bit.
But then if its not
performing as you expected
you have to discard and go back
to what we really need to review.
What did we learn from this
what do we need to do next.
So there are three options you have
when youve developed your KPIs
for a short period of time.
And then once youre happy that
they are performing as they should
is there a way to automate?
So take the effort as measuring.
Yes this could be a manual
process while youre testing
and if its in the review
cycle but after that
can be it automated or semi automated
because you should be spending your time
on looking at what the data
is telling you not collecting the bad.
And this one leads us into dashboard.
The dashboard is a big word right?
And yes like that you can have too many
but when to develop your
key performance indicators
what can you do here that can
help you support business
improvements long term?
So obviously trends and insights.
You dont wanna be
spending time collecting
you wanna be spending time reviewing well
Where are we going?
What are the trends telling us?
What are the insights
telling us what again
what action do we need to take again
so we can improve the next
period of our business.
These are all very simple
things when you keep it simple.
But when you go too far you get too many
and effort is taken like
precious effort is taken
in your business thats
focusing on the wrong things.
And again operational
effectiveness will tell you that
you should be spending
your time on the things
that matter absolutely
within your business.
So again the question I always ask is
what are you gonna do today
to measure your existing
performance indicators to find
them into key and not key?
And then are there any more that
are worth doing and
setting up and piloting
within your business so you can
improve your performance
and customer delivery?
I hope this makes sense.
And this is Shay Lynch as usual
saying thanks for listening.
