Measuring the right things
Know what drives value in your business
“What is your organisation trying to achieve?” It’s a simple question but when we ask it of clients we invariably get a variety of answers back. This matters if your business unit aims to use its data to drive insight and performance because managers will disagree on what should be measured and what resulting changes should be prioritised.
Tip 1: Get clear on what you are trying to achieve
If this describes your workplace then the answer is to take a step back and define carefully what the organisation and departments are trying to achieve. The old adage of making it Specific, Measurable, Achievable, Realistic and Timebound (SMART) holds here. The time taken to do this will repay itself many times over and usually helps create a more harmonious leadership team.
Tip 2: Define what drives the results you care about
Behind every outcome and target there are a few factors that influence its achievement. These factors are usually fixed and objective and can be described in a value-driver map like the one below for a business unit of a legal firm:
These take time and practice to construct correctly, and you benefit from external expertise to construct them if you don’t have a dedicated analytics team already.
Tip 3: Ensure you measure both the inputs and the outputs
It often takes a lot of hard work and effort to achieve business goals and targets and knowing whether you are on-track and able to celebrate some milestone or interim success is just as important. Don’t just monitor the final result, but also the inputs that make that success possible as these can often be more directly managed.
Tip 4: Integrate insight with the people and process elements of your business
The best data driven insight is not worth anything unless it’s integrated into established ways of working in your business to drive decisions and make changes in the business. Getting insight reviewed as part of existing meetings and workflows helps to get it used more effectively and consistently. Careful consideration also needs to be given to aligning the incentives of managers to the business objectives and foster a culture of collaboration and joint problem solving rather than blame. Where these elements are forgotten there is a natural tendency to bury the data or influence the metric rather than the underlying business performance. Finally, have a thought to dashboard design; there are few things as confusing or challenging for a human to engage with than an overcomplicated dashboard. As a test, ask yourself the question “Are we having a good month or not?” If the answer isn’t obvious from your dashboard within three seconds max, it’s too complicated.
Check back over the next few weeks, where we’ll be discussing the other key points required to make full use of your data analytics, or what you need to bare in mind when setting them up.
If you’ve got a specific question or issue with your data analytics you’d like us to answer fill in the form here. If you choose to leave your question anonymously we’ll answer your question in the final article of the series, or if you leave your email we’ll respond directly.