C-Level Insights: Driving Value — Part 1
Stay on Course: Three Tips for Using Operational Metrics to Improve Performance & Predict ResultsAre you using operational metrics effectively to manage your company? According to a Deloitte survey of leading companies, only 34% are good at using operational metrics to drive performance, even though 86% are effective at tracking financial metrics. Try these 3 tips to incorporate operational metrics into your business strategy and to enhance your bottom line.
Tip 1: Connect key goals to a few operational metrics (not just financial)Relying solely on financial metrics to measure performance may fail to:
- Tell you why there’s a problem
- Explain how to fix or prevent the problem
- Predict what will happen next
- Focus on your top 1 to 3 customer, talent, sales, marketing, or product priorities.
Tip 2: Make them easy to understand & focused on what needs improvingThe operational metrics you select should be:
- Simple, straightforward and meaningful
- Easy for your diverse team to understand
- Based on what needs improving vs. what fits the current measurement system
Operational metrics can be measured in numbers, like financial metrics, and should be easy to understand by all internal stakeholders.
Tip 3: Clearly communicate the importance to employeesTo build momentum and buy-in with employees explain:
- Why the goal is important
- How you will measure it
- What result they can expect when the goal is achieved
To drive significant bottom line results, operational metrics provide leading indicators in time to impact results, take out the guesswork for smarter decisions, and align teams to hit key objectives.