What Gets Measured, Gets Managed
For managers, the main question is “How do I measure up?” But what most managers forget is that to be successful you must first define what success looks like to you. Easier said than done for most, but at the end of the day it is about the outcome you want.
Once you have that covered and you have the plan in place focused on that outcome what you should be asking, sooner than later, is “Is it working?” Because if not, where you may end up is an absolute unknown—meaning you are no longer managing to your desired outcome; and this is not where any location manager wants to be. This is exactly why having key metrics in place to measure your progress is imperative.
Metrics give you insight into your business performance. They are markers that gauge how effectively you are running against the plan. By properly using metrics, managers can better understand the progress that has been made, if any, in reaching set goals. And they can use this information to drive harder, course correct, or revisit the plan in its entirety.
Figure 1: Metrics give you something to aim for and keep your goals in line.
Whether you decide to use key performance indicators (KPIs) or other forms such as performance metrics, business indicators, or performance ratios, it is up to you to choose the correct measurement method. These metrics should be derived from the areas of your operation that are important to measure, such as sales year over year, compliance, labor costs, guest satisfaction, ______________ (fill in yours). This transparency gives you the ability to see your business from different perspectives which provides vantage points you otherwise may overlook and your competitors are definitely missing. In a nutshell, these vantage points become part of your competitive edge. And external standards and benchmarks need to be used wherever possible so there is a comparative nature to your metrics within your respective competitive field.
Key performance metrics provide…
- Performance targets to keep the entire team focused
- A well communicated call-to-action for all team members to rally around
- Early problem detection before they become detrimental
- Indicators around the health of the business
- Consistent analysis to view variances and apply timely, corrective actions
- Quantifiable demonstrations of success or failure to learn from
- Continuous reinforcement to push for higher performance levels
Caution: DO NOT develop metrics that are unrealistic or unachievable. But do engage others in determining and examining your metrics to gain the benefits of a checks and balances system.
*Make sure any goals that form the basis of your metrics are SMART (Specific, Measurable, Attainable, Realistic, Timely)
Ensuring your course corrections actually fix the problem is the final core ingredient to the Key Metric Variance/Corrective Action management fundamental.
- First, retool the plan to get back on the right path
- Second, reschedule the right resources to get it done
- Third, make sure it fits your timeline
- Finally, continue the discipline of managing your key metrics and corrective actions as needed.
What we have described here is absolutely critical. It is a tool that managers can rely on as part of their overall strategy. By making it part of the everyday structure in how you manage, you will find yourself making great strides for your business.