In today’s business environment I can assure you that there is no lack of data. Between websites, apps, reservation systems, point of sale, and customer interactions, there is more information at our fingertips than ever before. It can be overwhelming to determine how much time should be spent analyzing information from different sources. In addition, it can be challenging to determine which information is correct. All of your data sources contain valuable information that can be mined to help drive profitable growth for your business, but you may be running into some challenges.
Someone once shared with me a story about a consultant that visited a manufacturing facility to solve the facilities production problems. The plant needed help because they were showing a loss in their books and couldn’t figure out why. The consultant reviewed all the metrics and told the plant manager that everything looked great. The consultant then left and went on to his next confused client. Meanwhile, the plant manager walked the floor and saw piles of defected widgets stacked up against the walls. (Shakes Head) It turned out that defects didn’t count on the scorecard. Sometimes no matter how many expert problem solvers you have, the problem could be right in front of your eyes. Numbers are great, but a pragmatic approach to problem solving is just as important.
Department A tells you that your cost per subscription is $20, and department B tells you that your cost per subscription is $10. Ten dollars doesn’t seem like a lot of money, but if you have 100,000 subscriptions, that ten dollar difference adds up quickly. In my work, I have found that when metrics are tied to compensation the calculations get fuzzy. If you personally had a $30,000 bonus on the line for keeping cost per subscription below $15 you might try to find ways to keep the number low. A business is not really concerned with personal agendas. A business just wants to know the numbers so that it can act accordingly. If your departments are arguing over metrics you should have a 3rd party create the metrics so that your employees can devote their time to improving metrics rather that fighting over how they are calculated.
Reporting Consistency and Timing
If you are a supporter of the metric driven organization you may want to consider consistency and timing. Systems provide data and people analyze data. The second part of that sentence is what scares me the most. People make mistakes and change things without communication. Josh was reporting on cell A1 + B1 but cell B1 had no information, so he took the average of last year instead without notifying anyone. Hopefully there are no major decisions being made with Josh’s reporting. Consistent reporting is key even if the reporting is consistently wrong you can still see any changes to the metric. Having the best information can help you make the best decisions. If you found out this month that your customers were complaining about foul tasting dried pineapple last month. You got the best information too late. What’s worse is that you signed a contract to produce the foul tasting dried pineapple for the rest of the year with no opt-out in the contact. The speed of information is very important in today’s business world.
Whether you have “hidden problems”, conflicting metrics, or just need consistent timely reporting; DJR Jeeves Consulting is here for you.