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Hub You - Do Your Organisation's Measurements Support Its Goals?
Once you have decided on your business, legally established it, set it up and launched it…then the real work begins. Even though you have a well-developed marketing plan and have already consulted with your trusted professional advisors, you’re still not really sure just where to start. The good news is that there is a logical place to start; in fact, it is the place at which many successful businesses start. You will start getting the word out by utilizing your most valuable marketing resources: everybody you know.That’s right, these valuable resources are none other than those people who are already around you. Your friends, family, acquaintances, neighbors, and even your co-workers are a wonderfully productive place to start your marketing campaign. I’m always amazed at how many new businesses don’t take advantage of such valuable word-of-mout
A bottle making company supplying the brewing and soft drinks sector with returnable packaging materials had been lulled into a false sense of security by consistently good financial results and a high customer satisfaction rating. It came as a shock to the CEO when demand flattened and then declined. If they had had measures for monitoring the external environment they would have noted two worrisome trends that converged to squeeze demand. (A.)The near total adoption among their customers of initiatives like lean, six sigma and TPM that drastically reduced breakages, and (B.) The growing preference for cans and cartons to bottles among their major customers.
Get a Balanced View with a Family of Measures: There is an African proverb which says that you cannot watc
The lines are blurring between segments - we've seen fast-casual and full-service restaurants with drive-thrus begin to challenge the competitive advantage traditional quick-serves once had. Taking a diversion from the usual focus of this column on training and service, let’s look at what you can do outside to bring more customers inside.Get online. Make it even easier for customers to get their meal from you. If you can minimize the ordering process at the unit, you save labor and the customer saves time. Yes, you might have to create an express line, but to have orders placed online, instantly print in the kitchen, and be paid directly into your merchant account saves tons of time when the guest arrives. Additionally, no one has to pay attention to the fax machine! The real benefit, however, is the database of information these customers
In very general terms, organisations process inputs received from resources into outputs delivered to their stakeholders. For business concerns the inputs are capital, labour, materials and technology. These are converted into products and services for customers and financial returns for investors and other financial stakeholders. Visit the url below for illustration.
http://www.leapfrogalliance.com/ezgrphx/biz.jpg
Systematically Decide What to Measure: The most obvious source of organisational performance measures are the stakeholders.
In staking out a position in the marketplace, responding to competition and the environment, the organisation crafts and attempts to implement a strategy. Thus organisational strategy, missions and goals are another source of performance measures.
The procedure is to determine the critical business issues that are relevant to the satisfaction of stakeholder needs or successful strategy implementation. For these business issues determine the critical success factors. Finally metrics are chosen to measure these factors.
Example:
A mechanic workshop might recognise customer service as a critical business issue. The critical success factors required for this business issue might include prompt attention, accurate diagnosis and repair and proactive service. Specific measures for accurate diagnosis and repair might include first pass yield (i.e. percentage of vehicles diagnosed and repaired "first time right" as opposed to those that have to be returned a second time).
Measures so derived are results based and can be used to report performance, align effort and manage accountabilities.
Internally, the business is organised by function but, as we have repeatedly stressed, carries out the conversion of inputs to outputs (i.e. creates value) through business processes. Since the effectiveness of the processes determine all future results, measures of process effectiveness are required.
Further leverage over future results can be gained by managing organisational capabilities since they determine the effectiveness of all future processes in the organisation. To do this requires that measures of these capabilities are tracked.
Example:
An entrepreneurial business school regarded as its main result measures the number of its graduates leaving school with a viable business plan and the number that established businesses that survived three years or more. For process measures, the number of open ended case studies solved, number of hours spent on interactive business simulations and number of internships were chosen. Capability measures included the number of active successful entrepreneurs, and board members on the faculty, and the number of businesses with which the school had a close relationship.
Visit the url below to see the image illustrating leverage.
http://www.leapfrogalliance.com/ezgrphx/lev.jpg
Lastly, the organisation must maintain a certain level of environmental awareness to avoid surprise changes that may result in significant negative impacts, or in missed opportunities.
Example:
A bottle making company supplying the brewing and soft drinks sector with returnable packaging materials had been lulled into a false sense of security by consistently good financial results and a high customer satisfaction rating. It came as a shock to the CEO when demand flattened and then declined. If they had had measures for monitoring the external environment they would have noted two worrisome trends that converged to squeeze demand. (A.)The near total adoption among their customers of initiatives like lean, six sigma and TPM that drastically reduced breakages, and (B.) The growing preference for cans and cartons to bottles among their major customers.
Get a Balanced View with a Family of Measures: There is an African proverb which says that you cannot watch
If you’re in the process considering using a recruiting firm in order to find sales and marketing talent for your company, you may know that there are at least a couple of options out there for you to consider when it comes to the type of arrangement between yourself and an executive search firm. One is retained and the other is contingent. By retained we mean you are working exclusively with the search firm and you’re paying their fees as you go for performing those services. Contingent means that you only pay the fees at the time they successfully place a candidate in the position that you’re looking to fill. The notion of exclusive verses non-exclusive is a different one though in contingent search. Many companies do contingent search, but they want to know that they are building an exclusive partnership with their client for the assignments that
The procedure is to determine the critical business issues that are relevant to the satisfaction of stakeholder needs or successful strategy implementation. For these business issues determine the critical success factors. Finally metrics are chosen to measure these factors.
Example:
A mechanic workshop might recognise customer service as a critical business issue. The critical success factors required for this business issue might include prompt attention, accurate diagnosis and repair and proactive service. Specific measures for accurate diagnosis and repair might include first pass yield (i.e. percentage of vehicles diagnosed and repaired "first time right" as opposed to those that have to be returned a second time).
Measures so derived are results based and can be used to report performance, align effort and manage accountabilities.
Internally, the business is organised by function but, as we have repeatedly stressed, carries out the conversion of inputs to outputs (i.e. creates value) through business processes. Since the effectiveness of the processes determine all future results, measures of process effectiveness are required.
Further leverage over future results can be gained by managing organisational capabilities since they determine the effectiveness of all future processes in the organisation. To do this requires that measures of these capabilities are tracked.
Example:
An entrepreneurial business school regarded as its main result measures the number of its graduates leaving school with a viable business plan and the number that established businesses that survived three years or more. For process measures, the number of open ended case studies solved, number of hours spent on interactive business simulations and number of internships were chosen. Capability measures included the number of active successful entrepreneurs, and board members on the faculty, and the number of businesses with which the school had a close relationship.
Visit the url below to see the image illustrating leverage.
http://www.leapfrogalliance.com/ezgrphx/lev.jpg
Lastly, the organisation must maintain a certain level of environmental awareness to avoid surprise changes that may result in significant negative impacts, or in missed opportunities.
Example:
A bottle making company supplying the brewing and soft drinks sector with returnable packaging materials had been lulled into a false sense of security by consistently good financial results and a high customer satisfaction rating. It came as a shock to the CEO when demand flattened and then declined. If they had had measures for monitoring the external environment they would have noted two worrisome trends that converged to squeeze demand. (A.)The near total adoption among their customers of initiatives like lean, six sigma and TPM that drastically reduced breakages, and (B.) The growing preference for cans and cartons to bottles among their major customers.
Get a Balanced View with a Family of Measures: There is an African proverb which says that you cannot watc
Majority of the modern organizations consider their employees as their greatest assets. Organizations are shifting their focus towards workforce to get a quantum leap in the efficiency. At the same time, employees are eager to grow up the hierarchy in an organization. So, what is the magic mantra behind becoming an asset of an organization? This article provides a new perspective by re-examining different types of professionals and points out the areas where an employee should work to become a great leader in an organization.Most people are concerned on why the organization is not pursuing their growth. They are concerned about every aspect in the organization, the processes followed, their manager, co-workers etc. At the same time, they are a demanding crowd and will not be satisfied by the remunerations from their employer. They have time only t
Measures so derived are results based and can be used to report performance, align effort and manage accountabilities.
Internally, the business is organised by function but, as we have repeatedly stressed, carries out the conversion of inputs to outputs (i.e. creates value) through business processes. Since the effectiveness of the processes determine all future results, measures of process effectiveness are required.
Further leverage over future results can be gained by managing organisational capabilities since they determine the effectiveness of all future processes in the organisation. To do this requires that measures of these capabilities are tracked.
Example:
An entrepreneurial business school regarded as its main result measures the number of its graduates leaving school with a viable business plan and the number that established businesses that survived three years or more. For process measures, the number of open ended case studies solved, number of hours spent on interactive business simulations and number of internships were chosen. Capability measures included the number of active successful entrepreneurs, and board members on the faculty, and the number of businesses with which the school had a close relationship.
Visit the url below to see the image illustrating leverage.
http://www.leapfrogalliance.com/ezgrphx/lev.jpg
Lastly, the organisation must maintain a certain level of environmental awareness to avoid surprise changes that may result in significant negative impacts, or in missed opportunities.
Example:
A bottle making company supplying the brewing and soft drinks sector with returnable packaging materials had been lulled into a false sense of security by consistently good financial results and a high customer satisfaction rating. It came as a shock to the CEO when demand flattened and then declined. If they had had measures for monitoring the external environment they would have noted two worrisome trends that converged to squeeze demand. (A.)The near total adoption among their customers of initiatives like lean, six sigma and TPM that drastically reduced breakages, and (B.) The growing preference for cans and cartons to bottles among their major customers.
Get a Balanced View with a Family of Measures: There is an African proverb which says that you cannot watc
Many nonprofits find themselves faced with the challenge of streamlining their communication channels - website, print newsletter, mailed funding appeals, print outreach materials, phone system on-hold messages, an annual report, advertising in local papers, etc. Multiple operating sites, diverse staff and time constraints may cause your brand message to get lost in the shuffle.How do you make the most of your organization's marketing outputs, from different sites and staff members, conveyed via a range of media? Create a strong organizational brand and make sure it's used consistently across departments, site and marketing outputs, both print and online.The challenge, of course, is how to create that high-impact brand and make sure that it is applied according to defined standards in print and online marketing materials to diverse audience
http://www.leapfrogalliance.com/ezgrphx/lev.jpg
Lastly, the organisation must maintain a certain level of environmental awareness to avoid surprise changes that may result in significant negative impacts, or in missed opportunities.
Example:
A bottle making company supplying the brewing and soft drinks sector with returnable packaging materials had been lulled into a false sense of security by consistently good financial results and a high customer satisfaction rating. It came as a shock to the CEO when demand flattened and then declined. If they had had measures for monitoring the external environment they would have noted two worrisome trends that converged to squeeze demand. (A.)The near total adoption among their customers of initiatives like lean, six sigma and TPM that drastically reduced breakages, and (B.) The growing preference for cans and cartons to bottles among their major customers.
Get a Balanced View with a Family of Measures: There is an African proverb which says that you cannot watc
Say the phrase 'Call Center Careers' and sudden images of telemarketers flood the minds of many. This is an unfortunate stigma. The truth is, Call Center Careers are much more and offer a wide range of demands and tasks. It's not just someone trying to sell you something; it's an actual job, one you have dealt with on many occasions.Whenever you call for directory assistance to find a new bookstore or try to schedule an airline reservation for that upcoming vacation, you use a call center. This is where your call is received and responded to. Someone who has a career in this area will help you find whatever information you need or talk through any problem you may have. Their priority is to serve you.Call center careers are not easy, another unfortunate stigma. Many believe that any one can answer a phone and speak. That is t
A bottle making company supplying the brewing and soft drinks sector with returnable packaging materials had been lulled into a false sense of security by consistently good financial results and a high customer satisfaction rating. It came as a shock to the CEO when demand flattened and then declined. If they had had measures for monitoring the external environment they would have noted two worrisome trends that converged to squeeze demand. (A.)The near total adoption among their customers of initiatives like lean, six sigma and TPM that drastically reduced breakages, and (B.) The growing preference for cans and cartons to bottles among their major customers.
Get a Balanced View with a Family of Measures: There is an African proverb which says that you cannot watch a dancing masquerade from one spot. A family of measures reflecting the various areas of organisational performance should be chosen. The balanced scorecard approach advocates measures to track financial performance, customers, internal operations and learning and growth. For each area, measures that drive present performance should be balanced with those to guarantee future results.
Achieve Vertical Alignment with Measurement Hierarchies: The concept of vertical alignment means that employees at different levels in the organisation are driven towards the same goals. For example, a measurement system which holds a production supervisor accountable for quality while his boss is rated only on production volume is not aligned and will drive inconsistent performance. In order for performance measures to be vertically aligned from the level of individual jobs to the organisational level, different degrees of detail of a particular measure of performance must be made available at different levels of the organisation. For instance a hotel chain will have measure of customer satisfaction for each hotel, with results rolled up and summarised for the chain. It must be possible for someone at a higher level to drill down to view details, otherwise the measures will not be actionable. Visit the url below to see the illustration of a hierarchy of measures.
http://www.leapfrogalliance.com/ezgrphx/hier.jpg
Comparative Measures:
Measures as a means of tracking performance, diagnosing performance problems or decision making can only be meaningful in the context of relevant references and comparatives.
Baseline measures refer to the starting point. These are the values of the variables at the point of setting up the system, at the beginning of an improvement project or some similar event.
Trending measures show the chosen variable as a time series. This makes it easy to see the direction - improving, worsening or stagnant.
Control measures, generally used in combination with trending measures show maximum and minimum allowable values for the performance variable.
All the above are internal comparatives.
External comparatives might involve comparing your performance with competitors, industry standards or theoretical benchmarks.
In Summary:
Effective performance metrics must be derived from critical business issues and their success factors.
A balanced set of metrics which together form a family of measure must be chosen to reflect the multidimensional nature the business.
The external environment must be tracked even if it does not currently affect the organisation's performance
Achieve vertical alignment by creating a hierarchy of performance metrics
Make use of comparatives to put your measures in context
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