Rethink “Business Intelligence” (BI) & “KPI’s”
global, credit-bubble meltdown requires new thinking beyond cutting costs. But,
new thinking requires new vocabulary to explain new concepts that can be both
analyzed and managed by new, truly “actionable information”. Deeper profit
power metrics – that presumably will come from a “business intelligence” (BI)
system – must be added to our past “key performance indicators” (KPIs).
Why is BI
a bit of an oxymoron? Is it because we are using KPI’s that are refined
by-products of financial data, which are the lagging effects of still deeper, vaguely
known, but unmeasured profit power causes that proceed better financial results?
If our KPIs are only telling us that – “we aren’t improving, try harder!” – how
do we do more than just fine-tune the past?
we agree that “BI solutions” are really only “tools”? For big change to happen,
we will also need new: strategic architecture of insights (blueprint), support
systems to engender new beliefs that will then motivate the re-skilling of the
users to then realize the upside potential of better tools? We need a total,
holistic change plan and support to go along with better measurement of true
profit power root causes!
“ROOT CAUSES OF PROFIT POWER?”
follow this dig-deeper chain of inquiry to the elusive root causes of profit
most customers want (or can be taught to want) best total economic/service
value – assuming we have such service value:
is our most profitable segment-niche of customers? Read article #2.30
we ranked the customer niches by estimated profit contribution, what would that
report look like?
are our most profitable customers in our top niche(s)?
the most profitable customers in our #1 niche, can we find a few “advisor”
customers with which to re-define a new, improved definition for our service
value equation expressed in 8 to 12 specific service metrics? See Exhibit #3 at
next level of metrics do we have to measure, manage and improve to in-turn
improve the 8 to 12 service metrics? For example, what measurable daily
activities will help to improve effective fill-rates, which is itself a
foundational basic service metric? What measurable analytic reports will help
us to reduce errors to “zero unconditionally guaranteed”?
service personnel are ultimately responsible for changing their attitudes,
skills and team-work to achieve distinctively different and valued service
metrics, how do we measure their morale, skill levels, skill-improvement
certifications and team-work spirit?
4% of all customers are perpetual innovators that will grow far faster and more
profitably than the rest of their niche competitors, how do we identify them; measure
their year-over-year growth with us; crack them and partner them through total
won’t crack these target, “gazelle” accounts unless the entire team is
empowered to do “heroic service acts” for them. How do we measure the daily
“heroic acts” done by any and all employees and report that back to them real
time? Why is the feedback of “published praising statements” the oxygen for
continuous improvement of both personal-growth and service value? See
article 6.3 at merrifield.com, http://www.merrifield.com/articles/6_3.asp.
FedEx’s motto of the early ‘80’s – “People, Service, Profits” – points us down
the right metrics path for improving profit power. Within distribution we can
sell however many different niches of customers that each can have different
service value (metrics) equations, as well as profit-potential economics for
our core business model. We have to zero in on our most profitable niches and
customers within those niches to (re)define our service value equation metrics
and endeavor to capture 50% or more of “the customer profit pool” in that niche
for our market area.
If you are
looking for the best strategic BI capability for a distributor that delivers
the fastest, highest ROI possible, or, you would like to benchmark your
current BI capability (no strings attached) against this service, then
please contact me in order to sign up for a Waypoint Analytics workshop in a
city near you! The next will be in Oakland, CA.
on February 12th and then we plan to have one in Chicago in mid-March.
Consulting Group, Inc., Article 1.24