Talk to me in numbers – applying metrics to business success

If you have ever found peformance issues and the reasons being given seemingly incredibly complicated, then perhaps distilling the essence back to the number only may be the answer you are looking for.

For example, let’s say sales performance is down. A person can provide any number of reasons, incredibly well argued, as to why their sales performance is off. Or why they missed their last deal. And if they are any sort of sales person, they should be able to be pretty persuasive in their argument as they probably have been constructing in their minds for some time!

So how do you reshape the nexus of this? Well, get back to the numbers and the causal factors of success.

Step 1: Fishbone the profit and loss statement to look at where the revenue comes from

Step 2: Drill into the customers spend to determine which customers, what product lines, and which sales when.

Step 3: Determine the causal steps ie activity, necessary to get the success you need. For example, to sell $10 million of a service, you may need to have generated a sales pipeline of $30 million if you close 1 in 3.

Step 4: Determine the metrics that make sense around the steps to get to the target. For example, to get to $30million pipeline, you may need to have qualified $60 million of opportunities. If each deal is $10 million, it is 6 deals. You then track activity to create deals – number of presentations, meetings, sales calls, product demonstrations, roadshows and events.

Step 5: Turn the above into simple numbers next to boxes and track that against performance. This will in turn drive activity that leads to success and also may provide some focus to improve success rates on each successive step.

Used correctly, the above approach can move to an empirical analysis of activity that reinforces the right behaviours, and also how you can help along the way, and quickly ends long and unfruitful discussions.

If you have had a good experience – or a not so good experience – in applying metrics to your business, please leave a comment, I’d appreciate your feedback.

 

People, process, technology – still the 3 keys to successful application development projects

Hi, I have moved this blog to www.justindavies.com.au and you can read this post at the new blog here as well as accessing new posts. Thanks for visiting!

If you have found yourself in a situation where the process seems to change, accountabilities are uncertain and deadlines are missing, then perhaps you have a people, process and technology problem. Getting all 3 aligned is absolutely essential to ensuring a change process will work.

And they have to be resolved in that order.

1. People – what are the key issues: who owns the process, who is involved, what are their roles, are they committed to improving it and working together and importantly are they prepared to do the work to fix the problem

2. Process – a process can be defined as starting with a trigger event that creates a chain of actions that results in something being prepared for a customer of that process. Starting at high level and identifying the key big steps is important to see the process from end to end. Then moving into more detail to capture the various layers involved and various exceptions. Focussing on the high frequency (Pareto principle) transactions can have significant benefit to standardising the process. But also remember that it can be the non-standard transactions where service is slipping most or the potential for significant failure in the process may exist.

3. Technology – Now that people are aligned, and the process developed and clarified, technology can be applied to ensure consistently in application of the process and to provide the thin guiding rails to keep the process on track – to make it easier to follow the process than not do so.

Of course there is much more to getting a technology project right – but get the above 3 sorted out and you will be a long way down the path to project success.

Got any experiences or tips you’d like to share? I am keen to hear from you, so please add a comment….

 

Don’ta worry – Dumb Business thinking to avoid Part 2

Have you ever experienced the debilitating situation of not knowing what decision to make in a difficult circumstance? Or found yourself overwhelmed by the sheer volume of email and interruptions within your workday?

In case of the former it is caused by uncertainty (not enough facts) and a less than comfortable risk of decision failure.

In case of the latter, in many cases the day to day interruptions really get in the way of the big picture and most important jobs to be done. That type of continual interruption will make you highly ineffective – so you’ve either got to live with it, or change the environment.

I’m a big fan of getting time management in order, and my continual reference book here is by Alan McKenzie called The Time Trap. In this book he identifies the top 20 time wasters, and specifically how to deal with them.

My father would always say “Don’ta worry – what’s the worst that can happen?”. He isn’t Italian, but for some reason this simple sentence would provide some perspective and give the mind some necessary breathing space (distraction if you like) that allows the subconcious to trigger a logical decision.

 

You can’t get stuck in a rut – dumb business thinking to avoid Part 1

Business and leading people can both be hard and easy.

Getting stuck in a mental rut is also easy, and no wonder as making a similar decision based on past experience makes a lot of sense. It saves time, allows you to move onto the next task. But it also can increasingly become dangerous without some benchmark or checking from time to time.

The Harvard Business School published a book on Decision Making, 5 Steps to Better Results.

After your first step (buy the book) the 5 steps are:
1. Establish a context for success which is about setting the stage for making a good decision and involving the right people in the process
2. Framing the Issue Properly to make sure you are tackling the right question with the right constraints on an outcome
3. Generate alternatives through brainstorming and other techniques
4. Evaluate alternatives
5. Choose the best alternative

The book also covers a range of other issues that are really useful in considering ways to get to a smarter more considered organisation and team.

When I was a child, my father would take us to school. Sometimes he would go a completely different way to normal and make us late. When asked why he was taking the longcut, he would reply, “you can’t get stuck in a rut”.

My children also complain when I take a longcut. When I tell them “you can’t get stuck in a rut” their response is, “yeah, but carts are from the olden days when Grandad was a boy, there are no such thing as ruts now”. I do remind them that my Dad also got to enjoy sealed roads in cars….

Thanks to Mark Eveleigh for permission to use the above pic – ©Mark Eveleigh. Visit his site at for a range of great pics…

 

How to Stop Smart Businesses Doing Dumb Things

If you are in a professional services firm, then one of my favourite books is called Managing the Professional Services Firm. The book describes what to do when you have extraordinarily bright people, smart consultants, who know what they should be doing – but just simply aren’t doing it. The book covers so much more than that, and you will find it really useful if you are in or trying to move to that kind of role.

Many of the themes in the book talk about ensuring everyone is aligned towards the same goals. For example, remuneration schemes encouraging the wrong kind of behaviours.

It was good to see my post on 3 Reasons Why Smart People in Organisations Do Dumb Things generated some interest, and a colleague of mine Bill Wallance got fired up enough to create a new blog succinctly called Stupid Leadership dedicated to the topic.
I am keen to hear from you – you will have your own ideas, and I’d appreciate your comments.

 

George Negus, the aging sex symbol, on Information Technology

George Negus, who actually isn’t all that fond of being referred to as an aging sex symbol, gave a presentation in Perth at the wonderful venue of the Royal Perth Yacht Club.

He was discussing many things and was thoroughly entertaining, and at the conclusion of his speech answered some questions. I had my hand in the air to ask a question, and before he got to me, he launched on a tyraid about information technology:

“Ask yourself, what has information technology actually done ever done for anyone? Absolutely nothing..”. George proceeded to let rip and then asked for my question.

“Hi George, my name is Justin Davies from Ross Technology, a technology services company……”

Pause, and some general laughter….

“Well, now you mention it, the internet is pretty useful for research and I actually use it everyday…..”

George wasn’t at all wedded to a view that Information Technology and computers are useless; he just wanted a debate. He wanted to get stuck in and argue a point to get a better understanding. He particularly wanted people to think – he most certainly didn’t want people to just nod their heads. And he was also most generous, and I now have a signed copy of one of his books.

How does that relate to The Smell of Good Business?

In my view, not enough decisions or widely held points of view are actively debated enough. A bloody good heated debate, and judicious use of the F word does wonders in quickly test driving a proposition. But you must ensure it is the best idea and not the most strongest personality that wins.

So, I also invite debate. Let me know what you think….

 

The Rise and Fall of Bribal Marketing

I really enjoyed my early career in direct marketing. One of the things I found interesting was determining which promotional ideas would work and which wouldn’t. The idea was to spend only what was necessary to effectively acquire a customer, and to make the communication as targetted as possible.

We’d use promotional giveaways as relevent as possible to the product value proposition. An insurance one was a free pen for writing in to advise the date of your next renewal notice (we had a 50/50 chance if we knew when their insurance was due – otherwise they weren’t the slightest bit interested in insurance any other time of year).

Now we see plenty of credit card free insurance period offers, honeymoon home loan rate offers, mobile phone intro only deals and health clubs offering new members better deals than existing members. Everyone likes a good deal, but much of this activity just generates customer churn and reduces loyalty.

So, what has been your best promotion? Let me know….

 

The Plagerisation Generation

“You didn’t make that up. I heard that / saw that / wore that 20 years ago….”

One of the art directors I used to work with when I was in the advertising industry commented on retro styling. His observation was that new designers would explore new and different concepts for a goodly part of their careers and then stretch for something fresh. They would go back to what was current at the start of their careers and put a different shade of polish or spin on it. (Must work, I’ve just bought a retro set of golf shoes….)

But are there any perils to be considered in an age where copying, slightly changing and republishing / repurposing existing content and ideas is the norm? One could argue there are pro’s and con’s – and where does a blatant copy (sampling) end and a subtle copy begin.

And music certainly isn’t the only industry for this to occur within – the parallels for business in terms of revisiting existing concepts certainly hold true. New concepts ebb and flow, but often come back to a simiar essence, painting a different spin on existing approaches. Here is how we create value – fresh buzz words plus 3 interconnecting circles and a graph with Value on it with a diagonal line heading upwards to the right.

Got a view? What do you like / hate about our greater than ever capacity to use other people’s ideas? I would love to get your comments…

 

The Two Most Important Tools in Change Management

In a meeting today I was talking with a client who has a particularly dry sense of humour, and a great philosophical perspective on ensuring successful delivery of projects. We were talking about change management.

His simple and insightful comment was this:

“You have two tools you can use for change management – they are a carrot and a stick. You can dress it up any way you like, call it anything you like, and do as many Powerpoint presentations as you like – but at the end of the day, every change management process is about a combination of a carrot and a stick”.

I’ve got to agree…..

 

3 reasons why smart people in organisations do stupid things

Today I was trying to explain why organisations sometimes almost compell their managers to do stupid things – or certainly why it might appear that way to people further down the chain.

1. The glance analysis - the solution to someone else’s problem can often seem obvious. That can be due to the person not seeing the wood for the trees – but also can be from not really taking the time to understand local conditions before passing judgement.

I once had to endure a conversation from a person from Melbourne (nothing against people from Melbourne, on the whole I have found them very nice…). He was seeking to make some changes to the way an industry association operated in WA – and make a takeover bid for all the other related organisations in WA – and run it all from 3000 miles away. He then also proceeded to tell us how little we knew about how to run such an organisation. It was one of the first dinners I’ve been to where 4 or 5 normally mild mannered people were ready to belt someone they have never met before.

2. The flick pass – email management (or mis-management) can allow for easy flick pass of a task (generally with a comment attached adding to the workload). People in management roles are often so time poor that the constant barrage of email encourages sending an email onto someone else rather than stopping the email and really thinking about whether the task should be done. Whilst it may not win you friends, sometimes it is worth asking the question of the sender, “If I simply couldn’t get to this due to other commitments, what would be the downside?”. Or send them a quote for an hour of your time….

3 Conflicting goals – ever wondered what is the real goal the firm is interested in? Generally there is a terrible conflict between organisation goals eg. growth versus profit now…

So, what do you think? Add a comment below about some of the dumb things you have seen organisations do to their people (or their customers…)