A few years ago, the idea of business metrics was a somewhat novel concept. Today, businesses seem to have a never-ending list of measures, but still have trouble choosing the critical few to make better decisions, and better run their businesses. If you don’t choose your business metrics wisely, then measurement can become a colossal waste of time. This week at Wily Manager we talk about Lagging and Leading Indicators, and how you can use them to improve your business.
Monday’s Tip: You need to measure something. Measurement isn’t just for production environments. Service businesses need to measure their outcomes and processes too.
Tuesday’s Tip: Have a mix of Lagging and Leading Indicators. No one measure is perfect, and you need a combination of result (lagging) indicators, and activity (often leading) indicators.
Wednesday’s Tip: Measure outcomes and critical activities. Don’t be discouraged from measuring activities. If you know an activity is a critical enabler of a longer term outcome, you should be measuring your success at executing that activity.
Thursday’s Tip: Change your indicators over time. Your business will change over time, and your understanding of certain metrics will change as well. Don’t hesitate to change your business metrics accordingly.
Friday’s Tip: Don’t let your indicators take on a life of their own. If you spend more time measuring your business, than executing your business, then your measurement process has become useless. Sometimes, you may not be able to get perfect data for something you want to measure.