Keeping control

Grant Leboff: So Andy, one of the things you talk about in the book is keeping in control and I think that could give people the wrong end of the stick so what do you mean by that?

Andy Hanselman: The key thing for me is having the information you need and your people have the information they need to make the right decisions. Again very often I see in growing businesses the MD, he or she goes around asking a lot of questions and people wait till they get asked and provide the information. Keeping control is having those key performance indicators that actually tell you how well your business is performing, so the analogy that I use is; if vision is the destination of where you want to get to, then KPI’s is your dashboard that tells you in your car where you’re going. I actually see lots of people in their businesses and the equivalent is no dashboard, and they have to drive ten miles jump out check how much petrol they’ve got, check the engine temperature, oil levels, get back in the car, drive another ten miles. They have the information at their finger tips to actually tell them how well things are going.

Grant Leboff: And what’s interesting about that for me today is that so many companies are just swamped with data, there’s just so much data from their Google analytics on their website to their financial accounting, there’s so much.. there’s their CRM system, there’s so much that can be captured, so how does a business start to distil that down so that these for us are the important measures?

Andy Hanselman: I think a key thing is working what are our key drivers? So it could be, what does our vision call for? What does our dramatic difference call for and what does our customers say about us? The little, sort of, analogy that I use, I had a client we were getting bogged down in all this and I just sat him down and said. “if you were away from your business, living on a desert island somewhere, and you can only ring up once a week or once a month, what would you want to know?” And that just starts shaping that up, because if you get to the end of the month and somebody says “yes we’ve had a great month, sales were ‘x’.” But they tell you nothing about the number of inquiries that have come in for next month or what your debtor levels are like, or what satisfaction levels were like or what the performance was like, so it’s that mix of stuff that allows you to say, this is the information that I need. Then I think again it’s making sure that we see the information … In businesses in theory it’s collected, analysed, communicated and maximized.

The realities in lots of companies is it’s collected and nothings done with it. It’s analysed nothing’s done with it or it’s communicated where it does work, it doesn’t get maximized so we say turn it upside down. Maximize, what information do you need to maximize the performance of your business. Who and how should it be communicated to you in what format and frequency, who should analyse it and who should communicate it and I probably shouldn’t say this but if there’s lots of stuff being collected that nobody’s using, maybe stop doing it.

Grant Leboff: So how does a business ensure that information becomes useful, and what I mean by that, is one of the dangers isn’t it when you capture this information, is people start working the numbers, so the classic example is in sales isn’t it, where you kind of massage the, you know you’ve got to have a certain amount of inquiries coming in, so you kind of massage, well that was a phone credit but it was kind of an inquiry, so obviously you need the information but there is a, a balance so how do you check that balance and make it work?

Andy Hanselman: I think the big thing wherever possible is to look at the trends. So it’s the pictorial evidence, so first of all if it’s number of inquiries a week, or inquiries a month, if it’s each week I can justify maybe how I just missed it by one or two, if I over a period I could see the trend and the gap is getting bigger, we’ve got a problem or an issue. And I think the other thing for me is maybe painting pictures whether it is graphs, traffic lights, things that allow people to sort of see how well we’re doing so it’s not hidden and a big thing for me is not using them to beat people up with them but it’s actually about using them to share, how well we’re doing, and if there’s a problem what we need to do to work on it.

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