Start your Business Performance Measurement Dashboard with a Simple Stop Light!

Written by George Siragusa, Senior Business Counselor, Mason SBDC

In a previous blog and in a popular Mason SBDC webinar, we talk about strategy development and the risk of putting those marketing tactics before the creation of strategy. It is generally understood that strategy is realized through measurement, or to use the lexicon of business, “what gets measured gets "done".?In that series of discussions on building dashboards, we speak of creating a handful of prioritized strategic imperatives and then linking them to dashboard metrics that monitor and drive performance.?

Picking up the thread where strategic imperatives end and measurement begins is the focus of this topic entitled “Start your Business Measurement with a Stop Light!” ?

This discussion centers squarely around a question that often surfaces in my 1:1 business counseling sessions: “Hey Coach S., I am attempting, for the first time to create a simple set of measures that link to what we are trying to achieve. So how do we get started on ”building meaningful business performance metrics?” ?

My answer is nearly always the same, regardless of the sophistication of the business model, the team, or the domain space the company represents. It is guidance to use a simple but effective “Stop Light” framework.

In any of my 1:1 sessions with CEOs, Founders, Venture Company Personnel, Business Owners, and their staff, my guidance is to begin building their Key Performance Indicators, (KPIs), or ways to show how the business is performing, in a step-wise fashion:?

1. Identify no more than 9 (total) diverse performance metrics for a first dashboard attempt. Those measures should be representative of the four areas which we discussed in our strategy development blogs and webinar, namely, 1) Financial, 2) Customer Facing, 3) Internal and 4) Innovation related metrics.? (Example: Maybe your 1st attempt at creating the mix or “suite” of measures is 2-Financial, 1-Customer Facing / 1-Marketing, 2-Internal, 1-Innovation and 2-Project measures for a total of 9 measures!)?
2. Ensure those 9 metrics are quantifiable, in other words, are quantitative not just qualitative.
3. Choose a mix of “Lead, Lag, and Milestone” metrics.

• A lead metric, like a new product introduction, influences future performance.?
• A lag metric like the revenue generated from your new product introduction, shows past performance.?
• A milestone metric can be the due date of a key project deadline for example.?

4. Choose a “cadence” or frequency of data collection, reporting, and analysis, namely every 2 weeks, a month, per quarter and schedule a meeting to discuss these.

5. Assign your staff, (or you as the owner, founder, solopreneur)?etc. to collect the data, format the report and lead the discussion; delegate these duties when you can.

6. Place the 9 measures in a simple “box”, describe it with a short phrase and assign a Green, Yellow/Amber, Red “Stop Light” light to each measure, signifying desirability and progress (see example below)?

NOTE: This red, amber, green, is a traffic light system that tells you that ‘red’ statuses are an alert, needs immediate discussion, attention, solutions, ‘amber’ statuses signal caution-perhaps some limited discussion and ‘green’ means everything is on track, thumbs up, and move on.??

You can even indicate measures that are “Best Ever” with a “star!”???

In the case of the red or amber indicators, you would, of course, talk in quantifiable terms, numbers, statistics, percentages, ratios ?— again, terms that are?measurable.

Example:

With this bit of guidance, you as a business owner or founder, can begin developing your first business performance dashboard scorecard.?To come full circle, you can now hold your first, regularly scheduled meetings and track your progress against your strategic imperatives.?

You can always get direct help from the Mason SBDC and learn even more by registering for no cost, 1:1 Business Counseling here.?

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About the Author:?

George Siragusa, an Adjunct Professor at GMU’s School of Engineering and active Senior Business Advisor at the Mason Enterprise Center’s Small Business Development Center team, has mentored over 200 seed, growth and mature businesses. His coaching is based on his street-wise experience as a practitioner, not just as an academic.? With the strength of two, full, and parallel, 30 year+ careers behind him, in both the public and private sectors, it became time for George to focus his energies to “give back” and “pay forward”, those broad and deep experiences and perspectives that he collected during his military, engineering and business journey.

Upcoming webinars by George Siragusa

• Mar 23 - Building your business performance dashboard: A step-by-step guide - REGISTER
• Apr 13 - Preparing your pitch: Best practices in developing your business briefing - REGISTER