Recently, whilst talking about the success or otherwise of Facilities Management (FM) strategies to maintain business-critical infrastructure, reminded me of the similarities with the concept of ‘condition monitoring’ used by many forward thinking organisations to assure they achieve their FM visions and strategic goals.
Waiting to ‘fix’ a problem with a building’s air conditioning ‘coolers’ or other critical systems can be a popular strategy during economic or financial downturn. But whilst possibly achieving some short-term savings, relying on ‘reactive maintenance’ can seriously impact on longer term costs against diminishing budgets. And not to mention the debilitating impact that ‘run to destruction’ policies can have when used inappropriately. A better, and safer, strategy is to monitor the condition and performance of critical systems, and to take timely and appropriate measures to do something about potential ‘off spec’ issues before they become business impacting or costly.
And running a successful business is no different!
The key, of course, is knowing what to monitor, and also maintaining a system that allows you to ‘catch’ the problem well before it becomes an issue. Realising that a problem could have happened, in hindsight, from the ‘rear view mirror’ at least means you have learned. But forward looking, and seeking out potential ‘head on’ collisions is a far safer way to ‘drive’ your business. Reality is that heads up, and forward looking, will get you to where you want to go, more likely quicker and with less heart-stopping moments!
So what does this mean for busy business owners and managers? What could they be doing better? What should they avoid, or not be doing?
1. It’s not just about Financial Measures. The biggest mistake that many businesses and organisations make relying on traditional only financial metrics. These are important, and a good indicator of the past, but on their own are inadequate for ‘guiding’ and evaluating the ‘bigger picture’. For a more ‘balanced’ view, metrics should monitor/evaluate the 4 key ‘perspectives’:
- the financial perspective
- the internal business process perspective
- the customer perspective
- and the learning, and growth, perspective
2. Clarity and visualisation: keep it simple! For businesses and organisations that do continuously monitor and evaluate performance, perhaps the commonest mistake is to over complicate. Too many metrics. Not enough clarity on their relevance to the business and its overall wellbeing. Far too cluttered and not easy for everyone to ‘visualise’ at a glance. In a nutshell, what is needed is a very simple ‘Dashboard’ that synthesises the important drivers and key measures that reveals the ‘real’ condition and status of business. Out of sight, out of mind is not helpful!
3. Carrot and stick, negative vs positive of monitoring. Many businesses have a culture that ‘resists’ the need for regular and accurate reporting. Typically people don’t like passing on ‘bad news’, they see monitoring and reporting as the ‘stick’ which will be used to beat them into better performance. Ok, maybe a bit harsh, but generally many do only see this negative’ side. What is important is that the tools such as dashboards should be seen as an aid to ‘continuous improvement’. Once both management and staff alike realise that dashboards and such tools are a ‘positive’, the rewards for time invested will be worth it!
Condition monitoring is something that all businesses should be doing, regularly. Business Doctors has had a lot of experience helping clients to implement efficient and effective SatNav dashboards and performance monitoring systems that work. We know collectively what you should be monitoring!
So if this article hits a nerve, or you want to find out more about this important topic, feel free to call or contact us for a chat, no obligations.
I will address the most important measures that we typically can derive from a Strategic View/Review of the business in a later article, if there is interest.
Feedback or comments welcome!
p.s. (alternatively ask about attending 1 of our workshops on performance management which we are always running from time to time)