Good day, I felt it would be useful to regale my audience with a success story. You see a bunch of posts and articles about Key Performance Indicators (KPIs). I might see more than you based on the people I follow on socials and the very nerdy things I read. What I don't really see is info on how KPIs get used to improve business. Indeed, many organizations have KPIs and spend a costly amount of time collecting and presenting their pretty charts. My thought today is about the "so what" side of KPIs.
Stop Wasting Your Time
"That KPI report looks awesome." said more than a few executives. What they didn't say is "so what?". Can we take those charts and know what exactly to do with it? Do I know what components of the business, exactly, need attention (or not) based on your chart? If you cannot answer yes to either question I think you should stop making that chart. Right now. You should find out why, and what you are actually looking at, how it can indicate need for action or not and generate your KPIs based on this model.
Client Case Study
Most organizations have large amounts of data they collect, for reasons they define, to drive business decisions they believe serve their interests. The client in question here is a small online school. They maintain their accreditation through monitoring of various academic, school, business, and financial metrics. Data collection practice is excellent, process controls for what and how is adequate for their needs.
So what's the problem? The problem is new organizations often setup these systems and collect data because they're supposed to. Due to growth, knowledge, understanding, etc., they aren't able to consider what they are going to do with what they accumulate.
Periodic reviews of metrics allowed continuity of operations and general understanding of what needed to happen in various areas of business. The missing piece was specificity of direction. One metric area may show decline, is this a problem? Is it expected? Data processing into information was surface level. The results of this did not allow for deeper understanding necessary to allow scalability later.
Analysis of Why
To determine how to create an actionable structure for KPI data, I started at the top. A high level investigation of the "whys" of the business. The operating manual, the mission and vision statements, and the areas they observe data from.
Based on my look at why the business existed, the metrics could be generally categorized.
- Academic performance (students)
- School performance (staff)
- Marketing performance (leads/close)
- Financial performance (business operations)
Each area took data from different sources. Compiling the monthly and quarterly graphs and overviews was tedious. Results looked nice. Nice doesn't mean much though. Some of the data, particularly that sourced from the internal student database, was hard to pull. Rapid growth and the need for "something, anything right now" to record some of these data pieces presented a situation where retrieval was difficult.
So hard to get data and tedious processes to review your information is a problem. Lots of companies have this type of problem too. They collect and collect and aren't really sure what to do with it other than they know it should be monitored.
Path Forward
I read a lot. One of my favorites is called American Icon. It is all about how Ford was turned around in 2008-10. You should read that book, then read it again. A key takeaway I get from it is a method to define and display decision points in your data. For any given metric, you can certainly define a value which is "good" and one you could label as "bad". I like to use these, effectively, as upper and lower control limits. You can go ahead and use the math to actually do LCL/UCL if you want. You should if it fits your data. The point is to have a mechanism to identify when a business unit indicates a problem. Most people who build charts over even a couple years will not consider this. You have to ask the right question. You have to demand of your data insight into what it represents.
What we are doing here is finding the best way to assess the system we have built. In this example it is a school. they need to understand how their system is working and have action points tied to this knowledge. The Project which developed from this evaluation pointed them in the direction of improving how their data is structured and presented as information.
The end goal for their platform is to have a database dashboard and automate the monthly/quarterly/annual report charts. Each metric set has a set of determined values to present them with good trend and bad trend. Just refining the monthly side of this looks to save them about 10 hours monthly for one employee to dig through the systems and build the report. The trigger points take guesswork out of the review. They are getting time back and with it, understanding of direction and action when needed.
Metrics & Start. Somewhere.
This project was successful based on the first step of Start. Somewhere. "Why". If you cannot articulate your whys, you need to stop and figure out how. By a simple why analysis of mission and vision they could define where their data wasn't helping. A comparative observation of what they monitored allowed organization to find clarity in operations.
Starting simply is often all you need to do. I can help. Start. Somewhere. is built for simplicity and approachability. If you are having trouble getting started, if you aren't sure how to start, if you keep starting and stopping, we should talk. Book a free consultation today, and Start. Somewhere.
