Tracking progress should foreshadow the future not just report the past.
The world just changed. The data you have is now at least partially obsolete, and the goals set earlier this year may not still be relevant. Tracking progress should reflect your current position and foreshadow the future, not just report the past. Especially now.
How do you monitor and measure the progress of your business against goals, strategic initiatives and projects? The confidence you and your team have in the decisions you make is largely a reflection of having reliable data.
Technology has enabled us to gather lots of information, so we can measure just about anything we choose. Choosing the right metrics is a matter of identifying those things that really indicate progress against goals, and monitoring those metrics is the best way to keep the company focused on the implementation of the long-term growth plan. In the best of times, there will be bumps in the road. Today, we are dealing with a pandemic crisis of unknown proportions, but always long-term strategy serves as the guardrails for day to day decision-making, even in uncertain times.
No doubt you already have lots of measures in place. You track sales of stock numbers, customer orders, and safety statistics in the plant. Every department is asked to track actual against budget. There are so many measures no one in the organization tracks them all; no one could successfully take them all in!
Therefore, achieving goals requires a high-level dashboard that tracks the metrics most likely to help you achieve strategy. The dashboard doesn’t eliminate the need to track other activities. It provides focus and visibility of enterprise-wide strategic goals as opposed to daily operational and sales goals.
What should be on a dashboard?
First, think about what a dashboard is. Visualize the dashboard of your car. The feedback you get from your dashboard enables you to get to your destination safely. It tells you how fast you are going, if you have adequate fuel and, with GPS, if you are on course. Shouldn’t measures do the same thing for your business?
There are three kinds of measures:
- Outcome
- Internal
- External
Outcome measures are the results we achieve. In for-profit companies that usually means Revenue, Profit, and sometimes an ROI (return on investment) or cash flow measure. Internal measures are anything in the organization that can be tracked within a department or a project, like management development, new product development or a website launch. External measures are those measures that require someone else to respond such as share of customer wallet, customer loyalty, brand awareness, or market penetration. Strategic measures show you big picture progress toward strategic goals, and could include indicators of all three measurement types.
You should monitor no more than 12 measures, as these measures should be highly visible throughout the organization, updated frequently, and discussed constantly. These are the measures you want everyone in the company to know.
For each measure, set target metrics keyed to time. You should already have an implementation timeline; your results and your implementation should be correlating. Set target metrics for each measure for the next cycle (month, quarter, year) and then set metrics for the cycle as far out as your initiatives take you (probably three years) so that you can see the type of progress you are looking for in each measure.
These 12 or fewer target metrics, and your progress against them, are your strategic dashboard. Look for outcome measures that show a change in the right direction; internal measurements that show you are meeting the time, budget, and change goals of your strategic projects; and external measurements that indicate your implementation path is getting you to the right outcomes.
Your strategic metrics should be like lights on a dark path; they show you that you are on the track you need to be on, and if you have wandered off it, help you gauge where you left it and how to get back on it. Don’t wait until you are completely off track to determine that you are not headed toward your desired destination!! Make sure you have the data to be confident in your strategy.