Recently, CEO Bill Dann was interviewed by the Alaska Dispatch News for a piece in their “Innovator Magazine” due out in July. Many of the questions paralleled those that our clients have asked us over the years in reference to their organizations, so we thought we would share some of his answers in the next several blog posts.
This post deals with the topic of metrics. The question? “You emphasize the importance of metrics in good decision-making. In your evaluation of organizations, what are the most under-appreciated metrics?” Bill identified 5 metrics in his response. We have touched on each one below.
The first under-appreciated metric, a measure to tell you whether you are continuing to deliver on what your customers say differentiates you from your competitors. Your USP or unique selling proposition is what distinguishes you from your competition. It is what sets you apart from your competitors and is the reason your customers choose your product or service over another’s. For this metric, measure how well, from your customer’s perspective, you are delivering your USP.
Second metric, a measure to show whether the core processes of the organization are stable/improving. The core processes are tied to the USP. These are the processes that create or deliver your USP to your customer. If turnaround time is essential to your customer, then measure the efficiency and effectiveness of your production process. If your product or service is appreciated for its cutting edge technology, R & D might be a process to consider measuring.
Third metric, your success in attracting customers into active interest in your business. You can’t have a business without customers. Similarly, if your process to secure one customer is too lengthy or expensive, your organization suffers. How many new customers are coming in? How many leads are you talking to? What is the process used to attract new customers and is it running well? These are all measures you can track for this third point.
Fourth metric, whether your strategies for growth or improved performance are working. Often, an organization will measure whether or not the strategies chosen to move the organization toward its vision are being completed efficiently. What Bill is referring to here, however, is whether on not the strategies are being effective. If your strategy is on track, but it is not taking the organization where it needs to go, then the strategy needs to be tweaked or dropped. A metric will tell you this.
Finally, the fifth metric. Actually, the fifth is not really a metric, but rather a way of creating metrics. It is critical to look at how you display data, particularly point in time vs. trend data, to know whether changes are an anomaly or an indication of a trend that warrants change in policy/strategy. Bill touched on this topic in his recent newsletter on the Value of Data.
And there you have Bill’s list of the most under-appreciated metrics. We are interested in your take. Drop us an e-mail with your thoughts on metrics and which ones you feel are under-appreciated. For more on how to create a metric, visit our recent post “Building Effective Strategic Planning Metrics“.