Eight: Data and insight - measure everything in real time.

You've heard how you can't manage what you can't measure. It is true.

Take this common sense saying literally and act on it. Also, the world has realised that data is an asset and has begun to treat it as such.

What is the problem with not measuring everything in real-time?

If you can't measure something in real-time, it will at least delay your reaction. If the delay is long enough, you might never react, or your reaction might be out of cycle and ineffective (too late, irrelevant or worse).

If you don't get feedback immediately, it may be too late to respond, or your response - being out of cycle - may cause damage.

My responsive question is, "How can you run any business without the best information at your fingertips all the time?" If you're one of the people even asking this question, you may have become so used to feeling around in the dark that you got used to it.

In my experience, many organisations deliberately obfuscate the facts, preferring to operate in the fog, using narratives to "play the game".

I did a double-take when I first read the above quote, which I repeat here:

Illustration below: Up to now, this book purports to be a hyper-rational view of a well-run business hell-bent on 10X strategic execution. And we know that businesses, made up of people, sometimes behave irrationally. They are fraught with corporate politics, vested interests, egos, hierarchy, and even country politics.

Illustration below: This problem doesn't have to be sinister. Often, people are rational but from their perspective. It is for this reason that maps like this exist to help you think through other people's states of mind and build empathy:

I mentioned this before: During one of my rants, a wise man once said, "You know there is only one thing you can do with people?" "What?" I asked. "Love them." That's only part of the story, however. You also have to make it difficult for them to play politics. Do this by shining the light of data into their political corners.

There is a further "problem" that large businesses are compelled to grow. If they are not growing, they are shrinking vis-à-vis growing competitors. This means that, as a business, you must do whatever it takes to keep growing. This often means lobbying, particularly in the US. Lobbying is ultimately about siding with power in the regulatory space, not about the best products or about what's best for consumers.

Every pernicious issue I have ever grappled with in my three decades in business falls into this category of distorted intent, not the hyper-rational one I prescribe here. Everyday problems, even when significant, can be solved relatively easily.

There is only one antidote to this problem: measure and report as close as possible to every significant event.

Of course, statistics (measurement) are used all the time to support narratives. Still, unless you want to be nihilistic about the problem, the genuine attempt to instrument a business is the only way to overcome this, the ultimate issue.

Measurement also fits under 'check' in the PDCA cycle mentioned in the total quality management system above (we've said these systems are interconnected).

I strongly prefer a dashboard view of measurement. Your car's dashboard doesn't tell you what is working to standard, mainly if it describes reasonably static information; it only warns you - early - when something needs attention. Imagine the time saved if you don't have to read all those voluminous reports that ultimately say nothing interesting.

My 10X ideas for the data or measurement and insight system.

First, this chapter is about something other than big data, AI, or machine learning. Those are all beefy topics, and I am very interested in them. But, I am not an expert in those topics. I am, instead, obsessed with and well-versed in measurement.

Measure in real-time.

Aim to instrument every process, as well as all perceptions. Operate as close to real-time as possible.

Could you do something with the measurements?

A feedback loop is inoperable if you don't, as a matter of course, act on it. The corollary of the idea that everyone should bring data is that you must act on it. This is one of the reasons why I love agile and Agile. Even if a bombastic leader or a narrative vendor wins the day, temporarily, there is always an opportunity for course correction when your organisation lives by feedback.

Produce dashboards.

Nobody reads long reports, whether heavy on text or numbers. Learn how to tell a story with data. I like graphical formats interspersed with short and sharp "so-what" conclusions. If you must do long reports, create executive summaries for them, then throw away the reports or make them available only to enthusiasts on request. It is worth stressing this point. If you were in the habit of distributing reports instead of making dashboards available, stop and measure the complaints: I bet very few people will notice.

Create a culture that loves data and refuses to begin a discussion or debate without it.

A little bit of academic philosophy taught me a valuable lesson. Most arguments fall away when you define concepts well (to the satisfaction of the debating parties). Otherwise, you're building on sand. Being from South Africa and living and working in foreign cultures (US, UK, China, Hong Kong, Singapore, Australia, Korea, the Philippines, Malaysia, and Thailand) taught me never to assume a common perspective, no matter how obvious something may seem to you. Take this example: Exercise is good for you. Of course. Yet ... when I lived in Shanghai, promoting a wellness program, we were met with a commonly held view that the Western-style focus on challenging aerobic exercise or weight training isn't necessary nor good for you, although gentle movement (think Tai Chi) and everyday activity (walking) were encouraged.

Language is notoriously imprecise. Numbers interpreted and then voiced over, seeking clarification, is the only antidote.

Solve problems with data.

Most non-trivial problems in a complex organisation need analysis and the application of data. Using this idea, you can even build real-time models representing your entire business. (Please look at my comments on Lean Six Sigma earlier.)

Measure performance with data.

Could you ensure that all key performance areas have balanced scorecards aligned with the mission? Scorecards should be balanced to counter the water bed effect, i.e. focusing on one performance element might have the unintended consequence that another measure is no longer met. For instance, emphasising volume may cause quality to take a back seat. The simple solution is to multiply all the critical performance measures of a role or area with each other. Don't add them together.

Measure performance at the individual level and roll these up to determine a team leader's performance score, etc.

If you do the heavy lifting by working out the key performance measures for every role (ensuring that they are aligned with the mission), you can add these up to derive scores for teams, divisions, functions, whole companies and their leaders.

Measure performance daily, weekly, monthly and for financial performance periods.

Doing this rigorously effectively connects your KPAs to your periodical company goals and, ultimately, to your mission. You also manage your SLAs and avoid penalties.

You can make your measurement system easy and make it available to users to service themselves.

The ultimate goal is to have instrumented processes, such as red lights, that go on when SLAs are likely to be breached. This should be an early warning system to enable course correction in good time.

The ROI is infinite.

The ROI on a data and measurement system is infinite, which should be self-evident from my discussion. Build your measurement system as cost-effectively as possible, but insisting on measuring its ROI is folly.

The data system measures and reflects the other seven systems.

Without information to reflect our efforts, we're not managing our business and its systems. We need to achieve strategic execution at 10X levels.

Master list: measurement system.

101 (know): You have selected a measurement model based on your measurement philosophy. You have implemented some of this and started your journey towards the next (in-play) level.

Bachelors (play): You have implemented and formalised most aspects of the selected model into a systematic solution, producing actionable or near real-time results.

Masters (work): You are experimenting with automation and self-service of your comprehensive measurement system.

A PhD (solve) level measurement system is integrated into your overall management system. Measures, therefore, quickly lead to the indicated action.

A 10X measurement system incorporates the ideas in this chapter.

[That's it for the eight essential management systems. Next, we look at how to adopt a strategic execution mindset - this chapter is presented out of order here.]