Have you ever seen a serious runner not time his runs?
Football teams measure how long a punt is in the air, because higher air time means defense is more likely to prevent an advance.
Every successful “super professional” I have encountered over the years was simply amazing on knowing the state of their business in real time. These observations have helped me realize three things about measures:
1. What gets measures gets acted upon
Anytime I look at any measure, whether it is my daughter’s school report card, my cholesterol level, or the cash flow of my business, the measure evokes the following questions in my mind:
– STOP: What actions need to be stopped?
– START: What new actions need to be started? What actions need to be improved?
– CONTINUE: What actions need to be celebrated and is worth repeating?
2. We need measures that make action inevitable
There is data, there is information, and then there is information that makes action inevitable. Simple data and information clutter the mind and take away the ability to see the one thing you can do now to influence the future. Here is an example of each of the three types of information:
– DATA: My doctor faxing over my blood report that came from the lab. I read it and say “Hmmm, interesting.” Then I think whether I file it or trash it.
– INFORMATION: My doctor faxes me the same report, highlighting in green the areas I am doing well in, and the areas of concern in red. I got seven greens and three red markings. My reaction again is, “Hmmm, nice!” After I ponder and feel 70% success is not bad, I again go back to my decision: to file or to trash?
– INFORMATION THAT MAKES ACTION INEVITABLE: This time my doctor puts a star on only one thing on the green and red marked report. He puts a brief note saying, “Arjun, this is worrying me. If we do not do anything, you are going to fall in to high risk for a heart attack.” Now my reaction is not “Hmmm,” instead it is “GOSH!” I change my diet and start working out more. Action was inevitable based on the note.
3. Leading indicators are more effective measures than trailing indicators to influence the future.
Most businesses spend hours and days analyzing past performance data to see what worked. Why not use the intelligence to identify leading indicators that will help the business influence sales in future? Here is an example: In my years in the pizza world (Pizza Hut, Papa John’s and others) I realized these simple universal pizza facts:
– The more adverse the weather, the more likely customers will order delivered pizza.
– Based on my past behavior database, I also can identify those customers who usually order pizza when the weather is adverse.
Now armed with these two facts I go to www.weather.com and look at the ten day forecast for my markets. In the markets for which adverse weather is likely, I start taking the following actions to influence high sales:
– Schedule more delivery drivers.
– Ensure drivers to get their cars serviced and checked.
– Direct mail the “bad weather only” customers with a low discount but high value coupon.
– Wait for the adverse weather to arrive and hear the cash register ringing.
Hence, the challenge is to measure, measure, measure, with an eye focused on the action you’ll take based on the measure.