What Should We Measure, Part 2

July 26th, 2010 by Jim Cotterman

As a follow-up to my previous post, What Should We Measure?, I thought three slightly different perspectives would be quite useful. 

First, Ron Baker’s post at VeriSage discusses Key Predictive Indicators (KPIs) for professional knowledge firms.  It is based, in part, on another executive’s turnaround success leveraging and relentlessly focusing on three key success measures for his company — measures that are important to the customer!

Second, Fred Reichheld’s book, The Ultimate Question, suggests tracking a Net Promoter Score or NPS to understand best how your customers relate to your organization.  It is based on his research and expertise in the area of customer loyalty and economic results at Bain and Company.  It focuses on accountability for building customer relationships.

And finally there is the Hedgehog Concept in Jim Collin’s book, Good to Great.  The intersection of three key “circles” (what can you be the best at; what drives your economics; and, what are you passionate about).  Most important to this discussion is the second item - what drives your economics — “the single ratio that has the greatest and most sustainable impact on your economic engine”.

In each of these three perspectives, the focus is narrow.  Not one suggested a robust roster of metrics.  Technology has given us a means to measure, relate and track just about any activity we care about.  Finding the short list of truly important metrics is not as easy, but can lead to greater progress.

This entry was posted on Monday, July 26th, 2010 at 9:18 am and is filed under Economics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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