A question to start with: how many management indicators should you use to manage your company or department? One is tempted to answer with a quip: it depends on a lot!
Management indicators are generally especially useful to indicate trends, confirm them or correct certain practices. However, it is important to be sensible about this…
Apart from some managers suffering from “acute controllitis”, there are mainly two types of managers: those for whom management indicators are distant instruments for intellectuals and auditing companies in need of figures, and therefore not for them, and those who read them but do not use them correctly…
Let us put it another way: a management indicator taken out of context, incorrectly used, or buried among hundreds of others is of no use at all. It is a waste of time and efficiency.
A distinction must of course be made between management indicators used at the strategic, tactical, or operational level. The latter are time-consuming and should remain, as their name indicates, at the operational level. But too many managers use them to steer their companies or departments: this is called micro-management.
Tactical and strategic indicators should be much fewer in number and provide medium and long-term trends. For strategic indicators, we are talking about 5 to a maximum of 10 indicators. Tactical indicators are intended for department heads and their number depends on the organisation and complexity of the services and products delivered by the company.
The challenge is to find the right strategic and tactical indicators and their components. Indeed, an Indicator should:
• Be factual and not open to interpretation or discussion.
• Show trends based on constants (e.g., constant m2, constant personnel, etc.) to draw correct conclusions.
• Consider large volumes, amounts or numbers with a large impact on the business.
• Be actionable: no potential action = no indicator!
• Provide information on efficiency but also on quality (e.g., number of complaints / month and evolution).
There are a hundred ways of managing a company, but well thought-out tactical or strategic indicators are valuable aids to management that meets expectations.
Good thinking and good reading.