Have you ever driven a car that had no speedometer?
I had that thrill when a student at the Richard Petty Stockcar School of Driving at a motor speedway in California. With a wide track, angled aggressively at the curves, and being told to hug the wall on the straightaways, there was little reference available to a novice driver as to speed.
How it feel to have no information:
I followed my instructor’s car closely, but still could not tell anything about my speed, so
that I could neither compensate for lags behind the leader nor test my comfort zone at various points that matched the expectation of my instructor and my own increasing capabilities as a driver. Upon conclusion of eight laps of this, after pulling into the alley and climbing through the window on the driver side (there are no doors in these cars), I was handed a sheet with my timings for each of the eight laps. Only then, after when the information might have been useful, could I see how well I did.
Do you manage without a dashboard?
That’s how you would feel if you ran your company without a dashboard containing relevant metrics that drive your company. If you cannot relate to this, then you probably have been driving without a speedometer from the start and need to pay particular attention here.
…and great, relevant metrics?
[Email readers, continue here…] Metrics should be created by you and your managers to measure near real time progress of your enterprise. Those deemed critical to you and your managers should be combined into a single page on your desktop screen or in printed form and available or circulated as often as daily. These measures of progress must be fresh and meaningful. Yesterday’s sales and returns compared to same day last week and last year for retail businesses; Units produced and units shipped compared to plan and same period last month for manufacturers; Yesterday’s overtime hours by department; Ratio of hours worked to units produced; Backorders unshipped; Customer service calls in cue or unresolved.
Your turn to think of your most critical measures
You can think of numerous critical measures for your business that must not be ignored, but often are neglected by senior management. It is not bad to manage by walking around, a term that came from another of the many business advice books of the ‘90’s. But that method, although good for employee morale, is imprecise as a tool of measurement and should be relegated to a supporting role for you. Financial information from last month compared to plan and same month last year is certainly relevant, but not part of a dashboard, since there is nothing you can do to fix a problem when numbers are as old as a week, let alone the typical several weeks required to prepare financial statements for review.
Act immediately upon variances!
Finally, what good is the information contained in a great dashboard if you ignore it? Show that you value the information by acting immediately upon variances, even if only to question the numbers. Everyone down the line will become aware of your attention to their work, your interest in the outcomes and care for their success. And you will drive revenue and better control costs and the customer experience with quick reaction to the variances within critical metrics that best describe your immediate situation.
upon constant changes and call it a forecast? So, let’s spend a few moments defining this sometimes-confusing set of terms.
Note that I used the term “forecast” for revenues for the next year. The term is also used when projecting revenues for succeeding years.
measurable as steps toward achievement of your goal. Today, we explore how to create tactics to accompany each strategy, and even suggest a number of tactics to consider for your strategies.
Note that each of these tactics directly support the strategy, are measurable and assumed to be achievable, bought into by each department affected by the tactic. Note that the strategy calls for cooperation between business development, sales, marketing, product development, installation, and support. This is a great way to unify departments that once may have competed for resources toward individual ends, now pointed toward a common goal supported by all levels of management up to the CEO.
So, if you have not, create a concise map for your enterprise. Start with a reasonable goal, usually expressed as a revenue number some number of years into the near future. Assess your current resources and attempt to calculate the resources needed to accomplish the goal.
the size of your market niche, and whether you can overcome the many barriers to access customers within your niche.
some degree of your potential growth. What can you prove as a barrier to entry for competitors? Is it the advantage of time – years of development ahead of any competitor? A core patent or “thicket” of patents protecting your offering? A strategic relationship with one or more of the largest customers?
services businesses that make fine lifestyle opportunities for architects, doctors and dentists. But these types of businesses are not attractive to potential buyers willing to pay a premium for businesses that are worth millions more than their asset value. Building a great business to create wealth for the entrepreneur at exit, means thinking of the exit strategies from the beginning. Who or what type of buyer would be attracted to this business if successful? Great wealth is made from selling great businesses at immense profit for the entrepreneurs and investors who took the journey.
change the world for the better.
The good thing about a goal is that it is measurable, and progress toward it can be measured as well. Unlike your vision, which can’t be measured, there is a satisfaction in each step toward achievement of your goal. For business goals, your employees and investors will appreciate constant attention to the goal and reports of progress toward it. A goal serves as a rallying point for all associated with your vision.
whose creativity and intelligence are admired by many. But he dilutes his effectiveness with wordy PowerPoint presentations. It has become a long running joke between us, as I often remind him that most of us have a very limited attention span and ability to recall important points from a presentation.
visionaries who see a new marketplace or niche or how to reach the mass market in ways not previously attempted.
Leonard Kleinrock and a few of his UCLA computer lab students worked to send the first several text characters from UCLA to Stanford in 1969 over a direct line established for the test. They could send only the “LO” of “LOGON” before recording the very first crash of what was to become the Internet. And I’m sure they had no idea what they were fathering with that effort which eventually became ARPANET, and then of course, the Internet itself. They had no mantra, and a limited vision to connect mainframe computers to share academic information.
artificial general intelligence (AGI). Yet, so far, we have the foundation, thanks to development teams at OpenAI, Google and Microsoft among others. It won’t be long before we hear names of innovators who invent new uses for AI forming highly profitable companies around the work of inventors who laid the groundwork for these yet to come applications.
move oil through the Internet” and then he moved on. Immediately after the panel presentation, I found that one entrepreneur and began a conversation that led to my investing $100,000 in his vision of a supply chain enterprise based upon perfect knowledge of oil delivery systems, precise timing of delivery and coordination of resources to move oil from source to customer using the Internet as a frictionless tool for communication and coordination.
