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Metrics based Management
Kishore (August 2003) I have been always in favor of Metrics based Management. Some of the management books I read influenced my thinking and also my own personal experience also helped me a lot. Management which primarily involves decision making cannot be done without supporting information. You need correct and latest information. You should not only get information but with an option to support the information. When defined, collected and interpreted properly metrics can help a lot in organizational improvement. But collecting wrong information and metrics can also lead to bad decisions. The key lies in defining metrics that shows what is going well within organization and also what is not going well in the organization. No business or organization is in a 'perfect' condition that everything is going on fine. One of the books that helped me in my thinking is "One Page Management" (Book link to Amazon.com). I will illustrate how metrics should be defined with couple of examples: 1. If you own a residential property Key metric a property manager should be looking at Percentage Occupation. How many properties in the business are occupied and how many are vacant? By setting a goal to maintain this at 80-90% a property manager can drive everything that should be done by the team in charge. To maintain this ratio, it is important to retain existing residents as well as attract new residents. By delivering good service to existing residents, it is possible to reduce chances of existing residents leaving. To ensure this happens, having a related metric of average time for completion of maintenance requests by residents, it is possible to ensure good service. Like this a few other related metrics can be defined which will help overall goal and metric. 2. If you own an online business Though business organizations always have profit and loss related metrics that are mandatory, having different metrics that gives ideas to promote business and ensure growth, it becomes easier to achieve the profit one is aiming for. Key metric an online business can have is: Average shipping time for customer orders. By trying to keep this shipping time in a reason limit for different type of items, it is possible to ensure customers are getting serviced properly. Other example metrics can be: - Average number of orders per week After making such positive metrics, it might also be important to define metrics like - Average number of returned items per month. These are a few examples to illustrate how metrics can be defined. What metrics to define? If you think you should also use metrics to manage your organization, use the following tips to define metrics Define a metric that will be useful to measure effectiveness of organization and teams. Set up measurement systems to collect information necessary to determine the metric. Help teams to define metrics at various levels. Monitoring metrics is effective way to manage. It is better than other ways to influence team members. If you want some ideas to define metrics, let me know. If possible, I can help you. I highly recommend reading book One Page Management. Related Articles
Stages in Metrics based management Related Website |