Data drives the best decisions.
Whether it’s a daily stock-take, monthly update or annual report, your team will need data - to check you’re on track and to provide accountability to the people who pay the bills.
The best measures are easy to collect, up-to-date, credible and accurate. The details will be specific to your business and your team, but here are some general guidelines.
Run the numbers
Car dashboards, thermometers, bank balances. It’s numbers that give us the quickest idea of our circumstances.
So it's essential to get numbers wherever possible to make the best decisions.
Numbers are crucial in outlining the picture. But they don’t tell us what to do next. To make use of them, we have to interpret and make judgements.
Are we above or below where we expected to be? Why? What does the trend look like? What makes you say that? How does it compare with previous experience? Is that relevant?
You are more likely to get your analysis right if you present your data well. Look at trends over time to show normal and abnormal fluctuations. Show moving averages and target levels. Highlight deviant figures for discussion.
In some businesses there is a massive amount of performance information to choose from (eg manufacturing aircraft engines) and in some much less (eg a policy think-tank).
But don’t assume you need fancy IT systems. Logging the number of enquiries you have had this week can involve a check-sheet by the telephone, not expensive customer relations software.
Inputs, processes and outcomes
How do you pinpoint the most important data to collect?
The most important measures reflect your team's goals. If your team manages a nursing home, what is the quality of care your patients are receiving? What is your financial return?
If your team provides an in-house IT service, how quick is your response time and how happy are your customers?
You will also monitor the effectiveness of the processes behind the end results – were people’s rooms cleaned to the agreed standard? What percentage of invoices were sent out on time?
And finally your inputs – did you have a full complement of medical staff last month, or was there a high level of absenteeism, and so on.
The input-process-outcome model helps you to prioritise the most important measures (outcomes) and pinpoint the most vulnerable inputs and processes for regular review. A “balanced scorecard” draws together your key outcome measures with the most critical input and process indicators.
You may also systematically pull in external numbers that impact your system and help to explain your results – supply prices for example.
Team discussion on the most important measures of success creates alignment and focus in the team.
Some problems with numbers
Availability: Suppose the numbers you can easily collect give a “partial” picture of the overall endeavour you are managing (eg school league tables).
People are easily seduced by numbers. Hard data drives out soft (ambiguous, subjective) information even though the soft information may be just as important. You might be concerned that numbers will give the wrong impression externally and get your team to focus on the wrong priorities.
Resistance: Your organization may resist transparent performance measurement (eg doctors in the NHS). People may cite a blame culture, say that their jobs cannot be measured, or that they don’t have time.
This is a good opportunity to lead by example. Openly publish your own scorecard as an individual and for the team – what are your targets, are you hitting them? Walk the talk - model candid discussion of your results and plans for improvement. And point out the benefits of a transparent measurement culture.
Measurement increases success
What gets measured gets managed, and the evidence points to better results, better teamwork and better communication in organizations that embrace a measurement culture.
Quick Tip for Teams
(Up to 30 minutes)
- Go back to basics for your team Key Results. What are you trying to achieve, and how will you know how you are progressing and when you have done well? What indicators will tell you that?
- Start from the outside - what outcomes do you want for your customers? What do they want and expect from you?
- See if you can stick closely to the four criteria above: easy and cheap to collect; accurate and easy-to-understand; quantifiable; focused on outcomes first, then the processes and inputs you use to deliver the outcomes.
Quick Tip for Teams
(Up to 30 minutes)
- When you are happy with your measures, and are collecting data systematically, check out our continuous improvement techniques to help you achieve the best results you can.