Getting Down to the Business of Business

To measure is to know… Lord Kelvin

Therefore, what is known, has the potential for improvement.

Business performance is important for a variety of reasons. At a basic level, a business owner wants to break-even, and this is followed by the desire to achieve a level of success, which may or not be defined by specific end goal.

A lot of us work very hard to make our businesses successful, only to find that we just can’t seem to achieve the financial (and/or the non-financial) results we want.

If winning isn’t everything, why keep score… Vince Lombardi 

If we’re going to influence and affect positive change in business, we’re going to have to measure the correct variables, i.e. the inputs and the outputs. And it is the ‘process of measurement’ that will provide us with the opportunity to increase our knowledge as we track our progress from current state to our desired future state. Our actual performance versus our plan. In other words, we are simply going to have to keep score.

Let’s look at a simple analogy as an example, the decision to take a road trip. Here are steps we might consider:

–        We pick the place that we want to travel to

–        Research the different routes, tools, resources, and the various methods available to get there

–        We choose the best methods to get us from where we ‘are’ to where we want to ‘go’, and we create a ‘plan’ that contains the details and requirements for success

  • The ‘plan’ will contain the specific  performance criteria for the trip:
    • The Start date
    • Arrival date
    • Equipment needed
    • Resources required
    • Note: In project management speak, we basically establish;
      • Budget
      • Scope, and
      • Schedule

In most cases, it is at this point, the point at which we begin the journey, that measurement stops, and it’s reduced to either one of two outcomes; we either ‘succeed’ in reaching our end result, or we ‘fail’. The final outputs only, we fail or we succeed, without the inputs and the micro-outputs, and without the associated learning that comes along the journey. The opportunity to increase our ‘knowledge’, to reduce the risk of failure, and increase the likelihood of success, goes out the window.

Knowledge will decrease the anxiety associated with taking on risk. It will reduce the assumption, blame, and the resignation, associated with failure; and it will reduce the resulting depression associated with poor performance.

“If you are depressed you are living in the past. If you are anxious you are living in the future. If you are at peace you are living in the present.” Sun Tzu

Being at ‘peace’ is a result of the confidence gained through knowledge, experience, and wisdom, all of which are a results of measurement.

Performance metrics, key performance indicators, critical success factors, whatever way you may categorize your suite of performance measurements, they will always fall into two perspective categories:

1)    “Lagging”, or

2)    “Leading”

Why is this critically important to understand?

“Lagging” indicators are performance measurements that are measured after the fact; i.e. we either succeeded or we failed. Imagine, this is similar to driving a car by looking through the rearview mirror of the car at the road you’ve already covered. It is looking backwards at what you’ve accomplished and using that information to influence your decisions on the future.

“Leading” indicators are those performance measurements that are happening closer to ‘right now’, in the present moment. Now imagine that you are driving while looking through the windshield at the road in front of you, and just below the windshield is your dashboard providing you with your measurements of performance. You are now performing with ‘real-time’ feedback, immediate inputs and outputs, immediate cause and effect, immediate learning and knowledge.

To ensure effective performance, you must know the right things to do, right now.

You will want to have a performance feedback system that provides reinforcement of the right things, in the present moment; or as close as possible to right now. And if you’re not sure what the right actions are, then you better start reverse engineering these right actions from your business or strategic plan.

It’s important to know what the specific winning conditions are to achieve a high performance score whatever your endeavor. It is surprising at times, to observe so many people, teams, and organizations, that are unaware, unsure, and in some cases unknowingly sabotaging the winning conditions required for their very success.

Can you imagine NASA without a Mission Control Centre? Devoid of constantly measuring their performance relative to their plan. NASA doesn’t ‘wing’ it, why should your business be any different?

As we outlined in our previous articles, once the “Why” is established in a clear and compelling Vision, it is then time to define the “What” in the form of specific requirements, and to then look at the correct “Actions” needed to achieve the goals outlined within your plan. This is all executed in the arena of performance, on the field of play, where performance and score are transparent and evident.

As a business leader, an entrepreneur, or simply one who is interested in achieving high performance, it demands that you establish the rituals to be executed with the discipline which then evolve them into habits that are always under the microscope of performance measurement and correction.

It is where creating a culture of ‘awareness’ of performance which is high, and where corrections when needed. Where certainty is increasing, and risk is being reduced. And in the end, nothing is left to chance, and your desired destination is reached.

It’s Your Time to Start Measuring What’s Important

If you’re like most of us, you’re really good at obsessing, complaining, and being an abusive self-critic of your performance in life. Well, that’s not productive, rewarding, or sustainable. I invite you to contact us for a consultation and allow us to serve you and provide you with the capacity to serve (and ‘lead’) yourself in the best ways possible.

Take action, and act now… ‘Contact’

We want to hear from you…what are your thoughts?


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