Are your Key Metrics in place?
Welcome to 2010. It seems just yesterday that we were playing volleyball on the wonderful beaches of Malaysia.
I hope all of you had a wonderful break.
This year my first assignment has been with Dell Computers. One of the most noticeable aspects of their culture is their emphasis on measurement. This makes sense for a direct business like Dell as they measure response rates per offer, by channel, inventory turnover, customer satisfaction, time to order etc. If it moves they seem to measure it.
I wonder if this obsession with ‘managing by metric’ is one that we all can benefit from because it does seem true that what gets measured gets done.
But some metrics are more important than others. It is not ‘measure for measure sake’ but to measure what is important and to reflect these in the key performance indicators of the business. I often wondered how organisational leaders expected to build a culture of innovation yet there was never a metric about innovation in any of the leaders or managers KPI’s. This is a recipe for business-as-usual.
So if you want to develop a faster, more responsive organisation then I suggest the following key metrics:
1. A Speed to Market Metric i.e. How long does it take to create a concept and get it to market?
2. A Customer Response Metric i.e. How long does it take to respond to a customer complaint or issue?
3. An Approval Metric i.e. How long does it take each manager or leader to approve a proposal?
4. A Leader Response Metric i.e. How long does it take for a leader to give a response back to an employee? Many idea or employee suggestion schemes break-down because leaders take months to respond to a new idea.
5. A Speed of Payment Metric i.e How long does it take to pay suppliers and partners. As a small business owner I am often amazed how long large companies take to pay their invoices–the leaders want you to respond immediately yet do not want to pay you for ages.
These five speed metrics will ensure that customers and partners are being looked after quickly, ideas are being nourished and projects are not being bogged down by procrastinating managers or ‘analysis by paralysis’.
What are your key measures for your brand, business or department?
Yours in Speed,
Dr Ken Hudson
