Benefits of “Big Data” for Your Business

Benefits of “Big Data” for Your Business

According to W. Edwards Deming, “the fundamental job of a leader is prediction.”

To do this, you need data— the right data presented in the right way so you can make the right decisions.

Mid-sized and large corporations are hiring and training an army of “business intelligence” analysts so that they can capture, analyze, evaluate and leverage all sorts of data to do a better job at sales, marketing, customer service, creating the best team, and increasing profits. 

And they will use this information to target your customers and gain market share.

Facebook Google and Amazon and Netflix and Youtube know more about us that some of our friends and they are using it to sell us more products and services.

But all is not lost– your business can do the same even without the same volume of data and spending millions on fancy math majors and software.

I suggest that a place to start is to implement four “Rockefeller Habits”:

Rockefeller Habit #5. Gather Employee Input

Rockefeller Habit #6. Gather Customer Input

  • These should be regular parts of your intelligence gathering, topics for discussion at your weekly management meeting, and inputs for your quarterly and annual planning cycle.
  • Customer and employee data provide insights about what your company does well, needs to improve, and opportunities to provide something your competitors do not [for a competitive advantage]

The next Rockefeller Habit that is relevant to your data gathering is:

#9. Key Performance Indicators KPI for Everyone

  • Employees want to know “did I have a great day or week?”- having a clear and simple KPI can let them know this and keep their focus and efforts aligned with department and company goals.

Lastly, if every department and individual has the right KPI for your business, the most beneficial way to use all this data to evaluate, motivate and re-prioritize is to implement:

Rockefeller Habit #10. Scoreboards Everywhere [see below for last week’s email “8 Benefits of a Dashboard for your Business.”

  • These Habits are part of an “Accountability Management System”– where you have a single place to capture, track, review, evaluate, and use all your Data for strategic thinking and implementation planning.

It may sound a bit daunting, but we have seen clients develop their KPI and dashboards in about 3 months, and then build the habits to incorporate into their “execution rhythm” in another 3 months [or sooner.]

Flying with instruments calibrated to your journey is definitively more effective than flying blind.

Resources
Click here to download your own copy of the 10 Rockefeller Habits, the foundation of the Scaling Up process to align People + Process to Strategy, for a more competitive customer experience.

Why Every Employee Needs an Individual Scorecard

Why Every Employee Needs an Individual Scorecard

As we look to finish the year strong, today I am talking about report cards. 

Kids may not enjoy getting them in school, but as a parent, I find them a valuable tool to monitor progress, compare their results to their peers, get feedback when results are not meeting expectation, and to make changes to our process for homework and studying when there is not an “A.” 

Yet once our kids graduate and move to the professional world of work, we forget about this useful tool.

Your business has at least one report card – it’s called an income statement [or P&L].

But does every individual in your organization have their own customized report card?

This article from Entrepreneur Magazine explains why every person should have a scorecard/ dashboard/ report card.

Why Every Employee Needs an Individual Scorecard [by Riaz Khadem, published in Entrepreneur Magazine]

Here is an excerpt:

Why is a scorecard for every person in your organization so important?

Because the scorecard connects individuals to your company’s vision and strategy, and when all the jobholders in a company have a scorecard, the entire company is aligned.

With a scorecard defined clearly in measurable terms, and with specific roles identified, people will be focused on the most important activities. Accountability is clear.

But how does this type of business scorecard compare to the individual scorecards we are describing here? There are several important differences.

Let’s take a look.

  • Alignment with vision. The alignment to the mission or vision is usually not clear in business scorecards. They’re very clear in the individual scorecard.
  • Progress of strategic initiatives. Strategic initiatives are tracked outside of business scorecards within the individual scorecard because the five indicators in the individual scorecard are usually a mix of visual indicators and strategy indicators.
  • Concept of roles for indicators. The concept of roles for the indicators doesn’t exist in business scorecards. It does in the individual scorecard and is there to encourage cross-functional collaboration.
  • Related: How to Measure the Effectiveness of Your Company’s Vision
  • Information on the scorecard. Business scorecards include aggregate consolidated numbers; the individual scorecards show numbers from the source, where performance takes place.
  • A number of factors. Business scorecards can have a large number of indicators; the individual scorecard focuses on a few.

To find out how to cascade your business scorecard down to the individual, read about the process in our Guide to Coach Your Team for Accountability & Performance.”

Book Summary: Measure What Matters by John Doerr

Book Summary: Measure What Matters by John Doerr

I had lunch yesterday with my now-retired business partner and mentor, Dr. Jerry Newman. 

Since 1977 he has been teaching CEO’s and business managers that their
People systems and Pay need to align with business goals, and that all should be objectively measured.

You know, since Jimmy Carter was President… I was wearing polyester striped bell-bottoms, and during the stagflation years before Reagan and the economic growth of 1981-2008 and 2016 until now.

Not new news, people! 

I also just read “Measure What Matters” by John Doerr- who worked with Google and Intel and the Gates Foundation to do just that.

Here is are some excerpts– I recommend you read the whole book!

Summary of Measure What Matters — the OKR Framework

Objectives (Os)
• Simply WHAT is to be achieved
• Significant, concrete and action oriented
• They are a vaccine against fuzzy thinking
• The objective is the direction

Key Results (KRs)
• They benchmark and monitor HOW we get to the objective
• KR should be succinct, specific, and measurable
• The KRs typically include hard numbers

They are expressed in this format:

We Want to:
• {Objective}

As measured by this set of KRs:
• {1. Key Result}
• {2. Key Result}
• {3. Key Result}

One of the most sought benefits of implementing an OKR [Objectives and Key Results] strategy is corporate alignment. 

Four benefits of the OKR system: Focus, Alignment, Tracking and Stretch, were used by DR Andy Grove when he was CEO of Intel to return to its “rightful, dominant market position.”

  • Superpower #1: Focus and Commit to Priorities
  • Superpower #2: Align and Connect for Teamwork
  • Superpower #3: Track for Accountability
  • Superpower #4: Stretch for Amazing

The New World of Work

  • Continuous Performance Management
  • Culture -Conversations, Feedback and Recognition that supports your ideal culture

Some of my favorite excerpts:

 “We don’t hire smart people to tell them what to do. We hire smart people so they can tell us what to do.” — Steve Jobs 

Getting the entire organization focused on the company’s most crucial Objectives is key to employee engagement and ultimately success in the market. 

Studies suggest that only seven percent of employees genuinely understand their company’s strategies, and, what’s expected of them to help reach these corporate objectives. 

What is the connective tissue that enables this alignment? OKRs, (Objectives and Key Results) can provide the linkage and visibility to create true alignment in any organization. 

Doerr uses a football team analogy to illustrate why connecting Objectives is a blend of top-down and bottom-up planning. Setting successful OKRs requires a balance of cascading Objectives and Key Results down through the organization, and input from employees into their personal Objectives. (With the important caveat that personal Objectives must be in support of, connected to, the company’s top priorities). 

The top-down cascading connects everyone in the organization, creating alignment; and the bottom-up planning gives individuals a greater sense of ownership, creating engagement. 

Doerr quotes an exasperated CEO who states, “At any given time, some significant percentage of our people are working on the wrong thing. The challenge is knowing which ones!” 

“Ideas are easy, execution is everything.”

8 Benefits of Dashboards for your business

I have an important question for you …

How is your business doing? Can you tell me if you are having a “good” year or a “bad” year?

​​​​​​​If you can only check your bank balance or ask your accountant, you are flying blind… this is not enough information to make good decisions and evaluate what is working and what to change.

​​​​​​​​​​​​​​You may have heard of “Key Performance Indicators” or metrics, so let me tell you why I highly recommend that every business track these on a simple one-page document called a “dashboard.”

​​​​​​​8 Benefits of a Dashboard for Your Business

​​​​​​​1. Visibility: The new field of “Business Intelligence” or BI shows that the more you measure in your business the more you can improve. What is measured becomes a higher priority and gives you a tangible target to improve.

​​​​​​​2. Maintain quality during growth: If your business is growing, you need to make sure that you are maintaining the quality and customer experience standards and your team are not burning out.

​​​​​​​3. Alerts before systems break: When you track leading indicators, you can see issues coming before they happen. For example, if you track pending orders you might see that your current production schedule can’t handle the order volume and will be backlogged by two weeks. Dashboards can alert you to this before chaos ensues.

​​​​​​​4. Less stress: When you have a dashboard, you can get timely and accurate data on your business health, compared to your targeted goals and to historical trends. This will allow owners and general managers to feel more comfortable letting go of responsibilities while knowing they are “watching the store” and things are running smoothly.

5. The basis for accountability: How do you know your managers are doing their job? Easy, just check their department dashboards. Where do they need more coaching? — you will see a lack of improvement or a drop in their key numbers to let you know there is an area to discuss and determine the root cause. This ongoing process improvement conversation increases the business knowledge and the decision-making competencies of your managers.

6. Data to make/evaluate decisions: Did that marketing campaign or new training program yield positive business results? If you see improvement in your dashboard numbers, you can see if a project was successful.

7. Creates ownership thinking and alignment: This is especially true when business dashboard metrics “cascade” down to departments and to individuals. Employees and managers start to understand what they can do to increase revenue and customer service and efficiency or reduce costs.

8. Improves revenue, productivity, margins, profits, and teamwork. As you can see from the list above, focus and clarity around what is important to drive business value and improve your value to customers will only improve your financial results and operational capacity.

These are not just a “report card” or your income statement from last month– they are far more powerful as they look under the hood at the engine and other moving parts of your business.

Implementing dashboards and management review and planning around the data can be the foundation of high functioning, profitable and growing organization.

“That which is measured improves. That which is measured and reported improves exponentially.”  Karl Pearson

If you want to find out how dashboards can be the foundation of your business management and team coaching, you can read the rest of the process in my Guide to Coach Your Team for Accountability & Performance.

Download here: “Guide to Coaching for Accountability & Performance”

Step 4 of 6 to Coach for Accountability – Using Dashboards

Step 4 of 6 to Coach for Accountability – Using Dashboards

How do you know when to fill up the gas tank on your car?

Or when you are speeding above the speed limit? Or your engine is overheating? Or your tire pressure is too low?

Because … every car has a dashboard — a handy visual guide to the key things that matter to operate your vehicle properly. (Geeky history: They have been around since the early days of autos – the speedometer was invented in 1902 and installed in cars since about 1910. My great aunt Louise proudly told tales of driving her dad’s roadster over 100 miles per hour on country roads in the 1920’s.)

So if your $35,000 auto has a dashboard, do you have one for your multi-million dollar business?

Today I continue my 6-part series on coaching for accountability (you can Read Step 1Step 2, Step 3 here) or see all 6 steps on my 1 minute video slideshare.

Step 4 to Coach for Accountability and High Performance: Develop a Dashboard with your key metrics:

What should you include on your dashboard?

I highly recommend using categories similar to the “Balanced Scorecard” approach.

This means that your dashboard shows key numbers to track and evaluate:

  1. continue with financial measures (sales, profit, cash)
  2. add operational metrics (leads, proposals win rate, on-time-delivery, quality)
  3. include “voice of the customer” (net promoter score or customer feedback)
  4. employee experience (retention, engagement scores)

You can see the advantages of this concept– if you are focused solely on current sales or cash in the bank, there are other other areas of your business that need tending for future success. If you don’t have leads or are losing work to your competitors, or your service delivery level or employee engagement is dropping, these are warning signs that predict lower revenue and profits.

8 Benefits of Dashboards

1.  Visibility: The new field of “Business Intelligence” or BI shows that the more you measure in your business the more you can improve. What is measured becomes higher priority and gives you the tangible target to improve.

2.  Maintain quality during growth: If your business is growing, you need to make sure that you are maintaining the quality and customer experience standards and your team is not burning out.

3.  Alerts before systems break: When you track leading indicators, you can see issues coming before they happen. For example, if you track pending orders you might see that your current production schedule can’t handle the order volume and will be backlogged by two weeks. Dashboards can alert you to this before chaos ensues.

4.  Less stress: When you have a dashboard, you can get timely and accurate data on your business health, compared to your targeted goals and to historical trends. This will allow owners and general managers to feel more comfortable letting go of responsibilities, while knowing they are “watching the store” and things are running smoothly.

5.  Basis for accountability: How do you know your managers are doing their job? Easy, just check their department dashboards. Where do they need more coaching? — you will see a lack of improvement or a drop in their key numbers to let you know there is an area to discuss and determine the root cause. This ongoing process improvement conversation increases the business knowledge and the decision making competencies of your managers.

6.  Data to make / evaluate decisions: Did that marketing campaign or new training program yield positive business results? If you see improvement in your dashboard numbers, you can see if a project was successful.

7.  Creates ownership thinking and alignment: This is especially true when business dashboard metrics “cascade” down to departments and to individuals. Employees and managers start to understand what they can do to increase revenue and customer service and efficiency or reduce costs.

8.  Improves revenue, productivity, margins, profits and teamwork. As you can see from the list above, focus and clarity around what is important to drive business value and improve your value to customers will only improve your financial results and operational capacity.

As you can see from this list, implementing dashboards and management review and planning around the data can be the foundation of high functioning, profitable and growing organization.

Next article I will share details on Step 5 “Delegate, Don’t Abdicate” [see all 6]