Forget tracking traditional metrics and focus on decision-quality data that helps front-line managers do their jobs.
It’s safe to say that the clients I engage with fall into two categories when it comes to business data: those that are drowning in it, and those that ignore it altogether.
The ones that are drowning in data know all the relevant facts that keep them out of trouble with their boards or their senior executives, but struggle to tell you what really drives their business costs or profits. The ones that ignore the data are the savvy veterans that rely on their historical win/loss records in their business, but ask them to change course or innovate, and they are like fish out of water.
Chances are you’ll fall somewhere close to those two camps, and for some time, I did as well. Then that I realized that tracking data for the sake of “tracking” was a waste of time for me and for my teams.
There is data, however, that should be tracked relentlessly and used in all of your decision processes. I call this “decision-quality” data. These are the numbers that drive your business strategy and execution.
What is decision-quality data?
Decision-quality data goes beyond the traditional profit/loss packages that are churned out every quarter and disseminated to your business chieftains. Decision-quality data sets are the building blocks and the levers of your business. Examples include areas of your business that can be affected by the execution of your employees.
Put simply, your sales employees may not be able to directly affect your finance treasury function, but working together with your finance team, they can affect cash flow by selling credit-worthy customers, cutting better financial deals, and, when necessary, helping in the collection process.
The same can be said of your purchasing professionals teaming with distribution leaders and finance team. This team can coordinate at the front line to cut costs and reduce inventory spend by developing inventory and financial metrics that matter to them and the company overall. By working in concert, they have the ability to solve the problems that arise and avoid pitfalls in real time instead of reacting when the quarterly metrics come out.
Quite frankly, if you are collecting and looking at data, but not taking action as the result of it, STOP. You won’t miss a thing, and your team will thank you for saving them time to spend on more productive activities.
Don’t fall into the data-cycle-trap dictated by data tracked on a calendar basis for the sake of tracking. Ask your teams what data they need to be effective, and simplify the way for them to get it in near real time.
Once this type of data is in the hands of a cross-functional team of front-line managers, task them with the needed improvement, and watch them make dramatic impacts in your overall business performance and customer experience and, in turn, your profits. The results will be better and more sustained than if you drove them with a mandate from the top because these managers live and breathe in the environment that created the data in the first place. Their cross-functional nature and familiarity with the issues are a winning combination.
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