“Not everything that can be counted, counts, and not everything that counts, can be counted.” – Albert Einstein
This quote, attributed to Albert Einstein, applies to us today! In our world, there’s no shortage of data. Instead, our challenge is creating good key strategic indicators that measure both those items that can be counted and the more intangible items that are harder to quantify.
Establishing milestones and key indicators that provide valuable insights into our businesses, keeps us on track and moving forward. The strategic thinking plan that follows enables a higher rate of accomplishment as we evaluate the key components.
The process has five parts:
Identify the Key Components of Your Vision
Carefully view your Vision Statement and identify its key components. Typically sales and profit margins are included as key components. When someone uses your service or product, consider what follow-through process is implemented to assure clients of the investment they have made in doing business with you. Do you offer a guarantee? Do you ensure consistency of service?
Depending on your business, other components would include benefits to customers, positioning in the marketplace, company values, and efficient use of technology. Be sure to address protocol, staff expertise, work environment and communication. Determine which components are tangible and intangible.
Establish Key Tangible and Intangible Indicators
Using the components you have identified in your Vision, establish your Key Tangible and Intangible Indicators, and record them in a Progress Tracking Worksheet. An excel spreadsheet works well for this.
Sort the tangible from the intangible then transfer them to the Progress Tracking Sheet. Examples of Tangible would be those components that are measurable:
- Profit margins
Examples of Intangible would be components that may be more difficult to ascertain and measure yet are vital to the operation of your business:
- Customer satisfaction and service
- Core values and positive work environment
- Marketplace positioning and innovation
Create a Scoring System for Intangible Indicators
Assign a scoring system for your key intangible indicators and create a rating sheet. For example, assign a range of numbers for each indicator.
|Efficient use of technology||Challenged with technology|
|+ 10 9 8 7 6 5 4 3 2 1 0||0 1 2 3 4 5 6 7 8 9 10 –|
Allow yourself to be objective in how you would rate your intangible indicators. Specify how you would score each intangible indicator and identify the ratings you would give to each entry. As you progress, you are able to gauge your success in each area more objectively in terms of identifying if you are where you want to be.
Create a Legend
Develop a legend with benchmark ratings to determine where you think your company ranks for each intangible indicator. The legend should include as much detail as needed to create a clear understanding of both your standards and expectations. Create the narrative for each rating and ask yourself “What would a +10 in the use of technology look like in my company?” Or, “What would it take to change from a -5?”
As you question each entry and rating in terms of where you are actually, you can better gauge what needs to be done (or not done) to move your company into the rating you are seeking. List the rating systematically in increments and write the narrative for each selection. In other words, a +10 means…a +5 means…0 means…-5 means…-10 means. Write a paragraph with as much specificity as you can to determine the meaning of your score.
Create a Key Strategic Indicators Tracking Sheet and a System for Tracking and Evaluating Your Business
The Tracking Sheet contains both the ratings of the tangible and intangible components of your business. Tangible indicators come from financial reports and other measurable sources. Results for the intangible indicators are gleaned from the Scoring system and Rating Sheet you assessed for each. While the Key Strategic Indicators Rating sheet shows a snapshot of each component at a specific point in time, the Tracking Sheet shows an overview of how the Key Strategic Indicators change over time.
Decide how often you choose to evaluate your indicators. Plan how your results can be used to create systems for improvement. Ask the pertinent questions you need to ensure you are on track for what you intend to achieve.
The Tracking sheet shows progress and gives an accurate reflection of where you are in your business at any given point.
This is an important tool to give yourself the opportunity to see your business objectively and to implement the strategic thinking it takes to ensure your company is on track to achieving your goals.
If you need assistance in completing these five steps, use this link to reach out to me for a complimentary consultation.