Business Mover Best Practices around Metrics

What enables one company to improve business performance while others lag behind?  MESA  International and Cambashi’s study Metrics that Matter Revisited published in February 2010, has some interesting answers.  This study defines “Business Movers” as those companies who report business performance improvements over the past three years either dramatically on a key metric (EBITDA or Net Operating Profit) or broadly (across 10 or more of the 14 business metrics included in the survey).  Some of the key take aways of the survey are:

• Business movers are 2.5x more likely to show results to operators, supervisors and managers in real-time or within a shift;
• Business movers are approximately 3x more likely to effectively link business and operational metrics;
• Business are less likely to use homegrown technology than others.

What can we infer from these?  You’ll probably want to review the complete study, but I think these highlights demonstrate that timely, relevant information delivered in context through a professional, focused solution leads to better decision making and hence better business results as outlined below:  

• Timeliness is key to reducing the latency between an issue occurring and corrective action being taken to fix the problem; 
• Relevant, contextual information is key to ensuring that an action will lead to achieving the overall objective of improving business performance – hence the need to link operational and business metrics;
• I believe business movers are successful in part because they focus on their core competencies, and generally, developing an intuitive, sophisticated performance management software is not part of typical company’s core competency.  So it makes sense that business movers would use an external supplier of a performance management platform rather than attempting to develop it in-house.

These types of studies have significant merit in showing the differences between companies that successfully execute and improve performance and those that don’t.  In these economic times, understanding this is more important than ever and I applaud MESA and Cambashi for continuing this valuable research.