Twenty or so years ago, organizations would hire guys like us to come in and help them define metrics and measures. Often times there were not adequate data collection and storage systems, so we ended up counting a lot of things manually, and then getting our crayons out to hand draw graphs to represent these indicators.
Skip ahead in time a couple of decades, and organizations are still hiring guys like us to help them with the measures and metrics, but now its usually because they have thousands upon thousands of data points, but no ability to turn this data into wisdom, and ultimately better business decisions.
Blame Microsoft. They made it easy to have powerful spreadsheets and databasing capability on every desktop relatively cheaply. Now the guy who runs the janitorial service at the office has a PC with more computing power than the Space Shuttle, and 500 indicators he’s tracking.
We also see it in any professional sport. Did you know that in games that take place on the road, in the Central Time Zone, on odd-numbered days, in the same month as the coach’s birthday, when the starting line-up all had chicken for the dinner the previous night, the team has posted a win 58% of the time?
Now that’s valuable data.
Professional Sports organizations are very fat with cash – they can afford to waste some on useless statistics. Your organization probably can’t.
You need to figure out what results your organization is trying to produce, and then determine the key drivers of those results. For many organizations, the goal is to make money while minimizing various forms of risk. What are the simple key drivers of these things?
When I worked in the Retail Food industry we were very good at making a really simple business far more complicated than it needed to be. It seems to me there are only two drivers of the business that impacted all of the other things we were tracking:
- Did we have what the customer wanted on the shelf when s/he wanted it?
- Once that customer had everything she wanted in the cart, did we make it as easy as possible for her to part with her money?
There were literally hundreds of other things we were tracking, and some of them were actually valuable; but only these two things really mattered. Only the two things above would impact all the important result indicators.
What are the key drivers in your business?