How can you be successful with innovation, wellness, “going green” and other strategies that don’t show up as line items in your financial statements?
Before you can do the right things right, it is essential that you have a complete picture of your business, your goals and the strategies needed to reach those goals. While defining that picture may seem complicated, it can be broken down into four basic steps:
- Define the actions and outcomes you expect in
measurable terms.
- Improve communication to ensure everyone is
on the same page.
- Capture complete and relevant data at its source.
- Transform captured data into useful information.
Define the actions and outcomes you expect in
measurable terms
Each year corporate leaders and management teams devote countless hours to their strategic plans and defining goals for their businesses. This is typically referred to as the business “strategy.” In other words, what is to be expected if that strategy is successfully executed? The #1 reason CEOs fail is poor execution of strategy.
If you are like most organizations, your strategy includes objectives that have not been defined in measurable terms. Usually data relevant to these undefined objectives is not captured in the normal course of anyone’s workday and rarely in a way that decision-makers can quickly access and use.
To ensure that strategy is indeed executed, both the goals and strategies should be defined in measurable terms. For example, a goal to increase revenue by 20% might be measured by year-over-year sales, salesperson progress toward targets, profit margin and forecasted demand by product line. Note that it is important to include measures that indicate that the company is on the right track (e.g., demand) in addition to the more traditionally measured outcomes (e.g., sales).
Your strategy will likely contain more than sales-related goals. How do you measure such goals? A “green” goal, for example, can be much more difficult to define and measure. Examples of measures include energy usage and carbon emissions, as well as incremental revenue, customer retention and increase in market share. To capture data related to these measures, you will need to communicate with machines (e.g., to track energy use, to shut them off remotely, etc.) and people (customers, partners, employees, etc.).
|
Hard to measure?
Going Green | Knowledge | Quality | Compliance | Loyalty | Wellness |
Capturing sales and other transactional data swiftly and in electronic form is common for all companies, regardless of size. However, capturing the actions and outcomes related to many strategic objectives, such as “going green,” is not as easy to collect or measure in terms of strategy, but it is possible. There is technology available today that will help map out your complete strategy in measurable terms by manually entering or uploading any data not collected in company servers and linking that data with the rest of your strategy. In this way, you can transform data into useful information for decision-makers, exponentially increasing the chances of executing your strategy and meeting goals.
|
|
Improve communication to ensure everyone is on the
same page.
Defining goals and strategies is critical to the success of every business, but being successful requires more than just planning. It requires good communication. In simple terms, companies must share their goals and strategic objectives with the team members who will be responsible for achieving them. They, in turn, should share this information with their managers and support staff so that everyone in the organization understands what is expected of them and why their role is critical to the company’s success.
By creating the expectation that goals will be achieved, this type of communication helps to create ownership of each goal and strategy among the company’s key staff, increasing the chances of success in meeting both short and long-term goals. To best ensure that everyone is on the same page, make sure that the strategy and measures are accessible to those who need to act on them. In addition, the technology or other means used for this should allow commentary and interaction. Such a platform will encourage collaboration and provide an appropriate context that is so often missing in financial presentations.
|
| Your people will tell you what is really happening. They simply need to know what you are looking for and to be given a means to communicate with you! |
Capture complete and relevant data at its source
Once the company’s goals and strategies have been communicated and everyone understands who is responsible for what, the company should outline the processes, systems or machines that will capture relevant data by which to measure its success. This data may be captured manually by key staff or automatically by software, systems or machines.
Transform captured data into useful information
The next critical step is to create that “single version of the truth.” To do this, you need to create or enhance a real-time reporting system and present it to decision-makers in a format that considers the entire strategy and compares what was expected to happen to what actually happened and indicates what is most likely to happen next unless changes are made. Most often decision-makers rely on their financial systems to provide daily transactional results. Rarely do reports from these systems provide a complete picture, but a bit more information can be gleaned from flash or dashboard updates that contain more detail and trends about sales, customer or operational data. Often these supplemental reports require people behind the scenes gathering, reconciling and beautifying the data.
Can you imagine using your current processes to now report on your entire strategy? There is a better way. Use new Web-based technologies to collect relevant data from people and machines and transform that data into information in real time. The best solution will allow you to keep existing systems in place if they are working well for you. Now that you are following the four steps to a more complete picture of the organization, better, timelier decisions can be made.
Back to Top Abrige Homepage
|
| |
|
| |
| |
|
Sample strategies and
measurement tools |
|
|
Open innovation
Since 2000, consumer goods giant Proctor & Gamble (P&G) has shifted its R&D strategy from an internal focus to a consumer-centric focus where as much as 50% of its new ideas originate outside the company.1 No longer content to rest on the laurels of such popular brands as Crest, Gillette, Cover Girl, Tide and Eukanuba, P&G President and CEO A. G. Lafley shifted the company’s strategy to one called “Connect and Develop,” an open innovation strategy that relies on external input and data to generate new ideas for commercially viable, consumer-oriented products. Along with this new strategy, Proctor & Gamble also focuses on measuring relevant metrics. Be careful about what you measure, said P&G’s Jeff Weedman in a March 2006 article at InnovateForum.com.2
“If you use metrics that measure, for example, the number of patents you’ve got, then you can get an awful lot of patents, but patents don’t pay the bills. They don’t drive the revenue. So it’s the conversion of ideas to commercially marketable, consumer-accepted products that P&G focuses on.”
It is this type of innovative thinking, and the subsequent measurement of relevant data, that have kept P&G in business for 170 years and is one of the reasons it was ranked #10 by Fortune magazine in its 2007 top 20 list of most admired companies.
Back to Top Abrige Homepage
|
The impact of wellness
Until recently, employee benefits costs – healthcare, in particular – have been considered a necessary cost of doing business, external to a company’s core products or services. An emerging school of thought, however, suggests that employee wellness affects much more than a company’s bottom line as a human resource expense. Wellness also affects absenteeism, productivity and efficiency. In other words, healthy employees are more likely to successfully contribute to a company’s core business than sick or injured employees who are unable to perform at optimal levels.4
In this way, wellness does, indeed, contribute to every company’s bottom line and, as a result, needs to be stated as a measurable goal of every company. But how can wellness be quantified? Isn’t it a subjective measurement? Yes and no. Wellness can actually be measured in a number of different ways, both objectively and subjectively. Some measurement tools include a focus on program participation; efficient program administration; managing healthcare spending; employee productive measures; customer and employee satisfaction; and more. By measuring such items, decision makers cannot only see what effect wellness has on the company’s bottom line, but they can also implement strategies to encourage and emphasize wellness among their employees. A healthy employee is a happy employee!
Back to Top Abrige Homepage
|
| |
| |
|
Going Green – Earth-friendly construction |
|
In alignment with the importance of wellness, Boston hospitals and healthcare facilities are “going green.” Why? To conserve energy, facilitate healing and reduce the likelihood of medical errors, proponents say. How? By building with earth-friendly materials and utilizing natural sunlight, recycled water and rooftop healing gardens. According to an April 2, 2007 article in The Boston Globe, Brigham and Women's Hospital's $352 million, 136-bed cardiac care center will feature large windows that allow more natural light. Glue, paints and sealants that emit noxious fumes will not be used in interior construction, and by substituting rubber flooring for vinyl, there will be no need to strip wax with toxic solvents. The roof will be painted white to deflect heat, and the ventilation system will be designed to reduce the build up of latex allergens in ceiling spaces. 5
According to Arthur Mombourquette , Brigham and Women's vice president of support services and a key project planner, patients heal more quickly in this type of environment and patient, visitor and employee satisfaction increase. |
While such green improvements can raise construction costs up to seven percent, the long-term savings in energy conservation and wellness more than exceed the initial costs.
“Some of the savings are easy to quantify like reduced lighting and cooling load,” David Burson, the lead designer of the new Spaulding hospital building. “The larger savings would be in the improved outcomes for patients, quicker patient recovery times, staff retention...”
Costs, of course, can be measured relatively easily but what about customer satisfaction and energy savings? Can those be quantified? Yes! These intangibles can be measured by patient and employee surveys, employee retention, energy and water usage, revenue, medical errors, and average labor cost and then compared to strategic objectives. Key decision makers can then use this data when deciding where and when to make additional capital improvements, staffing changes or system updates. |
| |
| |
|
Competitive advantage at any size |
|
By doing the right things right, companies can gain a competitive advantage at any size without complex processes, procedures or useless data gathering. In fact, the tools and resources that companies need to capture and use data to their advantage exist today. Some can be plugged into existing infrastructures so there is no waste, simply improvement.
|
The complexity exists when goals are not defined and understood. By setting clearly definable goals and measurable strategic objectives – all of them – companies and their leaders can further remove complexity through succinct communication and collaboration. When working from the same context and with the same complete picture, company leaders and managers will improve the swiftness and effectiveness of their decisions.
Back to Top Abrige Homepage
|
| |
| |
|
Conclusion |
|
By doing the right things right, companies can gain a competitive advantage at any size without complex processes, procedures or useless data gathering. In fact, the tools and resources that companies need to capture and use data to their advantage exist today. Some can be plugged into existing infrastructures so there is no waste, simply improvement. The complexity exists when goals are not defined and understood. By setting clearly definable goals and measurable strategic objectives – all of them – companies and their leaders can further remove complexity through succinct communication and collaboration. When working from the same context and with the same complete picture, company leaders and managers will improve the swiftness and effectiveness of their decisions.
Back to Top Abrige Homepage
|
| |
|
|
