Inclusive Numbers become North Stars
Master how to measure only what matters in your business for better control and clarity.
If you know the bottom line of any business, you know how well it's doing, at least in terms of profit.
A lot of things get clarified with that one number.
What are other such numbers that you can come up with, that tell you if your systems are doing well? If you have ever tried it, you will know it’s not as easy as it looks like.
It is difficult to know what to measure, how to measure it reliably, and finally how to process it. In the database world, this is called as granularity — the effort to find the perfect middle point between too much data and too less. How big or small should the smallest grain of data be?
How we solve for this is very simple. Just list out what all reports you need from your data. If you need only monthly data, for e.g., capturing second level data will be a bit too much. If you need second to second updates, then your data better capture at least that much. Seems simple no?
This same logic can be applied to Key Result Areas and Key Performance Indicators. Here’s a quick breakdown:
First decide what you would like to see
That will let you break it down to essential pieces
From those, select the most relevant ones. Remove everything that’s not needed. This is where you need to be ruthless. Remember, everything that’s left in this list, will have to be measured and tracked every single time.
Measure only those. Ideally, by linking it to data that you already are capturing somewhere.
The 3rd step is critical, because that is where you know which metrics are the more fundamental ones and which ones are not. Remove all those that are not, unless you have a specific need for them.
Best part is, this process makes you feel in control of your business, like nothing else :)
Enjoy!