Driving Value: July 2011

Stay on Course: 3 Tips for Using Operational Metrics to Improve Performance & Predict Results

Are 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 though 86% are effective at tracking financial metrics. Try these 3 tips to incorporate operational metrics into your business strategy and enhance your bottom line:

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 1-3 customer, talent, sales, marketing or product priorities.

2) Make them easy to understand & focused on what needs improving
The operational metrics you select should:
•    Be simple, straightforward and meaningful
•    Be easy for your diverse team to understand
•    Be 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. Read case study>

3) Clearly communicate the importance to employees
To 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

Driving 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. Read full article > 

About Redstones
Redstones is a world-class management consulting firm with a stellar track record of high performance results. Leaders turn to us to increase revenue, expand cash flow and streamline operations building company value in any economy.