[et_pb_section bb_built=”1″][et_pb_row][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.0.72″ background_layout=”light” text_orientation=”left” border_style=”solid”]
This article is the seventh of an eight-part series to help you break through traditional growth barriers. Any one of these eight lessons, applied with confidence and persistence, can make a difference. Collectively, they can drive significant outcomes. Are you ready to begin a journey of Breakthrough Growth?
In the last article, we talked about the difficult process of prioritizing and scheduling your strategic initiatives and the projects that implement them. Let’s dig into how you will monitor and manage their success!.
Measure strategic progress
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 growth plan.
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, breakthrough growth requires a high level dashboard that tracks the metrics most likely to help you achieve a successful implementation of your strategy for growth. The dashboard doesn’t eliminate the need to track other activities. It provides focus and visibility of the measures that are likely to drive breakthrough growth.
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 path to growth?
There are three kinds of measures:
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 those measures should be highly visible throughout the organization, updated frequently, and discussed constantly. These are the measures you want virtually 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 measurements against them, are your strategic dashboard.
Determining what you should measure
Look at your key initiatives. What are you trying to accomplish and why? You will be looking 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. Here are some examples:
If you are trying to generate more sales by having more new products, set targets for the increase at key points in time. Measure the percent of sales from new products in the last twelve months, over time, against the expected increase. If your measurement is falling short, you then drill down into reasons why you are not achieving expected results. Projects derailed? Assumptions not working?
If you want to grow by increasing customers’ purchase amount, set targets for this increase over time, and measure the increase of the average customer spend compared to the previous month and previous year…and your target increase. If there is no clear increase, you look to the details of the projects that are meant to change those results. Are the projects on track?
If teamwork is the goal, you might measure the grade the employees give the organization on teamwork compared to the desired grade.
Your metrics keep you on course
The metrics you choose should indicate your progress against your strategic goals, so that you can determine whether or not you are on track to achieve them, and so you can make adjustments to the work of implementing those goals, if you are not meeting them. You should be monitoring the results you are getting compared to those you are seeking, not measuring the effort you have expended or the activities you have completed. Use the timeline to track actions and the dashboard to track outcomes. Every measure must be expressed in the form of a metric, tied to the desired outcomes.
For these metrics to have teeth, they should be incorporated into the performance review process, with results influencing feedback, salary increases and bonuses, as well as promotional opportunities.
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!!