What are We Thinking About?
What if there could be a common dashboard for your business, just like how (after many years) we developed a common dashboard for cars?
It would make implementation easy, everyone would know how to read it, everyone would make similar decisions in the same situation, etc. and, obviously, better decisions leading to better performance.
What Are You Currently Doing?
You are probably managing your business with traditional management tools - things like financial statements, scorecards, dashboards and regulatory filings. Field research indicates that these typically contain outdated metrics, that are:
- Gathered and reported too infrequently for today's business environment.
- Seen by too few people.
- Not predictors of future performance.
So, What's Wrong with That?
The measures of yesterday just don’t cut it for today. It’s a bit like that tachometer on your car - why the heck is that still there? (Even with a standard shift, you don’t need it!)
Think of this article – you get to read it for free. Does that mean it adds no value? (I hope not!) All it really means is that the money you pay for it is not the right measure of value creation, in this instance. Better measures of value-creation for this article would be the number of interactions (likes, forwards, clicks, comments, etc.). In fact, this type of non-dollarized, flow-based measures should be used for all intangible assets (Customer Capital, Human Capital, Structural Capital). That is why we have developed a new family of measures to capture these value streams.
The speed of business is now much faster than it was when your current measures and reporting cycles were created. You now have to make decisions within a day or week, that in the 80’s we could have made in a month or a quarter. This means that if your business can make a decision a month, a week, or day before your competitors, you gain and they lose. Almost every business collects data on a near-real-time basis and now needs to make decisions just as fast. Yet we are still relying on monthly numbers that we get two weeks after month end. Nuts, right?
Strategy is no longer the sole responsibility of leadership, and it can’t be! Strategy is now everyone’s everyday job. It is supercritical that everyone knows the strategy and how it applies to them, so that moment to moment they make decisions consistent with the strategy, not conflicting with it. They can only do this with a dashboard that clearly shows their daily / weekly / monthly contribution.
So, is Simplification Possible?
Good question. We thought so, but it has taken us five years of research and experimentation to develop a solid but simple e-HUD model.
After extensive research and client trials we have harvested and enhanced the 13 key metrics that every business requires including such things as:
- Velocity – The speed at which you get things done.
- Net Promoter Scores – How much your customers like you.
- Agility Index – How agile are you with respect to change.
- Culture – What is the energy of your business.
- Financial Index – Are your financials representing expectations.
Each of these metrics has ‘drill-downs’ to aid analysis against the dimensionality of your business, just like how a mechanic looks at the detailed metrics that inform a car's simplified dashboard.
What are the Benefits from an Executive HUD (Heads Up Display)?
Our clients talk about many benefits – but each business seems to have a different mix. The commonly reported benefits (in no particular sequence) include:
- Instant understanding - Anyone can understand what is happening at any time, anywhere in the organization. (Think of the last time you rented a car – How long did you spend familiarizing yourself with the dashboard before you began to drive the new vehicle?)
- Easy comparisons - The common metrics and your formula elements allow for easy comparisons across departments, divisions, brands, etc.
- Rapid implementation - Since it is an established framework, implementation is easy – it just requires your strategic priorities and available measures.
- “Eliminates” the annual performance review - Because everyone can see how they / their team / department / business is performing on an on-going basis, the ‘performance’ part of the annual performance review is no longer needed!
- Agility - The organization can change direction quickly – just by re-setting the strategic priorities.
To sum it all up...
Businesses have more things in common with each other than they have different, yet until now, we have used an endless variety of measures to report performance. Not only that, we are using measures and measurement tools that are at minimum decades old, but often a century!
The good news is that in this age of sharing and openness, there is an endless flow of new business books presenting new measurement concepts and measures. All we have done is combine our 35 years experience with this wealth of great measurement ideas to establish the e-HUD framework.