Knowing the importance of setting performance
Peter Drucker the guru of management-gurus said, “You can’t manage what you can’t measure”. Simple words but profound truth.
How did so many Japanese companies, with modest beginnings become so successful? Systematic measurement of every parameter at every step of the design, manufacture and delivery process. How did Gates Foundation go about the task of eliminating polio? In Bill Gates’ own words “maniacal focus on measuring … results”.
How did you as a little kid, go about getting better at a particular subject or sport? By setting yourself a measurable target and then striving to achieve it. Now that you are a promising young manager with high aspirations, how are you measuring your team’s and your performance?
Here are three tips, to do just that.
Tip 1: Your organisation has two broad sets of expectations from you. One, your team and you will be effective; i.e. get things done. Two, your team and you will be efficient; i.e. utilise resources like money, people space etc, efficiently. Therefore you would do well to set both effectiveness and efficiency targets.
Tip 2: The simplest and most robust way to measure effectiveness targets is, absolute numbers; units sold, units produced, revenue, costs, lead time and other such.
Tip 3: The most appropriate way to measure efficiency is with a ratio; output divided by input(s). For example, it could be sales or production per person/output for every rupee of revenue expense or capital invested and other such.
Summing Up, set your team and yourself for success. Set your Team’s KPIs based on an appropriate measure(s). Then, go for it. You will win. The very last line
By : Ravi Santhanam for ZEUS