“If you can’t measure it, you can’t manage it.” This is a contentious statement with proponents lauding its validity and opponents arguing that there are many things that cannot be measured, yet still have to be managed. I’ll let you decide where you sit in this argument.
In the meantime, can we at least agree that the things that are critical to your performance and that are measurable, are worthwhile measuring to enable you to manage them better? And if so, before we blindly rush off measuring all things that can be measured, there are a few critical factors to consider that will assist you in doing this more effectively.
- What to measure – your measurements need to be a mix of ‘lead’ and ‘lag’ indicators. A ‘lead’ indicator tells you what’s likely to happen and a ‘lag’ indicator tells you what has actually happened. I recall working with a young entrepreneur who increased his income from $300K to $750K in 12 months by getting this right. He had been very diligent at tracking revenue and for a time this kept him motivated however, he started to plateau. There was also an issue at that time with the number of prospects he had. When I asked him how he knew previously if he had enough people to see he said, “It’s a little silly really. I used to write them on the back of a business card and when it was full I knew I had enough.” I asked him to start that habit again with one small change. At the end of the month I needed him to let his PA know how many names were on the back of the card and we included this in his dashboard as a bar chart, directly under the Revenue bar chart. While I was congratulating him after one particularly excellent revenue month he said to me, “But I’m in trouble.” I said, “How do you know you’re in trouble?” and he pointed straight at the prospect numbers and we could see a declining trend. Fortunately, by tracking this key indicator and being able to refer to it ‘at-a-glance’ in our monthly meeting we were able to reverse this trend and as a result, he continued on towards record revenue achievements.
- At-a-glance – when you consider the dashboard of your motor vehicle, there are three key indicators that you can easily see ‘at-a-glance’ and they are: speed; fuel and temperature. These are the three most critical indicators that let you know about the current and likely future performance of the vehicle. It is a great responsibility to drive a car and as a result, the minimum amount of time that your eyes are off the road the better. It is the same with driving your business or your role. You need feedback ‘at-a-glance’ that lets you know whether you are on-track or off-track quickly. I am a visual person so I am a fan of the bar chart. These are simple enough to create in MS Excel and mine are simply target versus actual and either a yearly average or month by month. My Board of Management Report is a simple one-page report with all the key indicator results easily able to be seen ‘at-a-glance’. This enables me and my accountability partners immediately to be on purpose in these Monthly Meetings.
- Less is more – as with the dashboard of your car, too much information can be an unnecessary distraction. This is why it is critical to spend some disciplined time thinking about the activity that you can control (lead indicators) and desired outcome targets (lag indicators) so that you can nail the critical key indicators. The intention of your ‘performance tracking’ is to give you feedback quickly and easily so that you can spend your time more effectively achieving your outcomes than you do pouring through data.
By the way, effective ‘Dashboards’ have also been referred to as a ‘Cockpit Report’, a ‘Monthly Scorecard’ and I even have one client who refers to his as a ‘Flash Report’. Regardless of what you choose to call it, when you get it right it’s an awesome tool.
As simple as these ideas sound, in my experience they are harder to do in practice. I have a simple MS Excel Dashboard template that I am happy to forward to anyone who is interested to help them get underway.
I’d also to be keen to hear of your experience and method when it comes to your dashboard.