Scott Maxwell wrote an insightful post on the power of metrics-driven management. "The key to getting the right metrics program in place is to eventually
understand the minimum number of measures that give you an accurate understanding
of the state of your company." Scott's key insight here other than manage your company with data and measurement is to keep it simple. Name a successful company and you can bet the CEO is following 3-5 key numbers every day:
- at Google, the numbers would be number of searches served and average revenue per search
- at Flicker, it would be number of photos uploaded per day
- at Disneyland, it was park attendance every day and average number of rides per attendee (a customer satisfaction driver related directly to wait time)
You get the picture. This really goes back to how simple business is -- you should be able to look at a small data set on a daily basis that gives you blinding insight into the health of your business. Basic stuff like how many customers do I have, how many new customers am I getting, how much revenue am I getting from those customers and how long do I keep my customers. That was easy - we just identified all the drivers of revenue for your business. Now do the same for costs and you have your key metric set for your company.
ps same metrics, same presentation for every board/mgmt meeting; put it all on one page and then graph it so you can see trends and spot opportunity
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