Twenty or so years ago, organizations would hire guys like us to come in and help them define metrics and measures. Often times there were not adequate data collection and storage systems, so we ended up counting a lot of things manually, and then getting our crayons out to hand draw graphs to represent these indicators.
Skip ahead in time a couple of decades, and organizations are still hiring guys like us to help them with the measures and metrics, but now its usually because they have thousands upon thousands of data points, but no ability to turn this data into wisdom, and ultimately better business decisions.
Blame Microsoft. They made it easy to have powerful spreadsheets and databasing capability on every desktop relatively cheaply. Now the guy who runs the janitorial service at the office has a PC with more computing power than the Space Shuttle, and 500 indicators he’s tracking. Bad news – if you have much more than half a dozen metrics you’re following, that’s not a scorecard… that’s a laundry list.
We also see it in any professional sport. Did you know that in games that take place on the road, in the Central Time Zone, on odd-numbered days, in the same month as the coach’s birthday, when the starting line-up all had chicken for the dinner the previous night, the team has posted a win 58% of the time?
Now that’s valuable data.
Professional Sports organizations are very fat with cash – they can afford to waste some on useless statistics. Your organization probably can’t.
You need to figure out what results your organization is trying to produce, and then determine the key drivers of those results. For many organizations, the goal is to make money while minimizing various forms of risk. What are the simple key drivers of these things?
Many managers are scared away from data because their accountant and their stats professor from college teamed up to make sure that any numbers were completely incomprehensible to the average human (and thereby keeping them both employed).
Yet, taking just a bit of time to better understand the key numbers in your business is time extraordinarily well spent. And a fringe benefit is taking those numbers (that you now understand them) back to your stats-prof, or your accountant, and truly baffling them.