The terminology may vary—board pack, board report, senior management dashboard—but what unites senior teams is the shared ritual of collectively assessing a set of Key Performance Indicators (KPIs) to gauge the trajectory of their business. However, this seemingly universal practice raises questions. How many senior teams possess a meticulously prepared board pack yet never reach its conclusion? How common is it for teams to supplement regular reports with personal analyses, highlighting aspects they deem crucial but absent from the standard set? Are there senior teams scrutinising the same metrics they did five years ago, despite transformative changes in the business? And then, how many operate without a set of defined metrics, relying on intuition and verbal updates? These queries delve into the nuances of how senior teams engage with their performance metrics, prompting a closer examination of the effectiveness and adaptability of their current approaches.
Changing times, changing metrics
Amidst the dynamic landscape of business, where strategic plans undergo regular revisions to stay agile and aligned with current thinking, board metrics often remain untouched, carrying the weight of historical inertia. The longevity of these metrics can be attributed, in part, to the arduous process of crafting a board pack that gains acceptance from the whole senior team. Additionally, a peculiar form of tunnel vision tends to take hold, discouraging any inclination to challenge the status quo. Yet, it becomes imperative to pause and question whether the KPIs that once seemed precise and pertinent are still steering the business in the right direction.
Broadening the context
Diving into the broader context of board metrics reveals a common pitfall— an excessive fixation on a singular facet of the business: profit. Undoubtedly, we recognise the reigning importance of cash flow and the bottom line in organisational success. Yet, as we engage with the C-suite, a myriad of different perspectives emerges. Take, for instance, the Chief People Officer at a retail juggernaut who asserts that the true measure of success lies in whether the workforce takes pride in being part of the organisation. Simultaneously, the head of facilities, ever vigilant about the details, swiftly attributes potential profit dips to practical issues in the stores, such as malfunctioning lights or failed fridges.
In the realm of board packs fixated solely on the profit and loss of each store, there exists a vacuum where the broader business context is notably absent. Conversations are confined to the realm of sales, leaving no room for the insights of these senior leaders. Yet, both the Chief People Officer and the head of facilities present a compelling argument—they offer a lens to pre-empt losses in the store, an aspect that, in many cases, can be as impactful as profit gains. Simply put, organisations that neglect a holistic view in their board metrics risk overlooking opportunities to enhance week-to-week business operations. It's not just about boosting profits; it's about fortifying the foundations for sustained success.
How to refine your board metrics
To refine your board metrics, begin by revisiting your business plan and clearly define what you aim to accomplish over the next three years. As a senior team, identify the 6-8 most crucial objectives for your business, if they are not already documented. The key is to align the metrics you track with these objectives.
For each objective, engage in discussions to determine the specific measure or measures that will indicate successful achievement. Once a consensus on the KPI is reached, the next step is to establish how you'll collect the necessary data.
For instance, if your metric revolves around gauging employee pride in the workplace, consider the practicalities. Weekly inquiries might become burdensome, so opting for a quarterly assessment along with other key engagement statistics, stored in your HR system, could be a more feasible approach. The goal is to ensure that your metrics are not only aligned with your business goals but also practical and sustainable in their implementation.
The data platform
Over the past 5-10 years, a significant shift in technology has taken centre stage—the ascent of the data platform. In a recent engagement, we encountered a client employing two individuals dedicated to investing half their month meticulously crafting the board pack for the impending leadership meeting. Today, the era of such labour-intensive manual analysis should be consigned to history. Enter the data platform—an automated powerhouse that effortlessly extracts and compiles vital information from every nook and cranny of your company.
This automation marks a revolutionary turn in the reporting landscape, transforming what was once a static presentation of information into a realm of dynamic analytics. The days of exhaustive manual compilation are behind us, paving the way for a more streamlined, efficient, and responsive reporting suite fueled by the capabilities of the data platform.
Conclusion
Throughout this blog, we aimed to provide insights into the process of refining your board metrics, ensuring alignment with the key strategic goals of your business. It's a blend of art and science, demanding regular refinement and periodic reflection to confirm the chosen measures are still relevant.
The upside is significant—once you've established a well-balanced set of metrics for your organisational performance dashboard, you'll unlock the benefits of holistic business performance analysis, moving beyond a narrow focus. It's more than just metrics; it's about cultivating a dynamic and adaptable system that evolves in sync with your ever-changing business landscape.
