As we embark upon a new year your organization likely is in the process of finalizing its goals for 2010. While business goal setting is a critical activity for all organizations seeking to clarify their strategic direction and key success metrics for the foreseeable future, it can take on a different complexion depending upon the nature of your particular industry and the unique economic and competitive landscape that you face. This is especially true when you own or work for an organization that is heavily reliant on innovation for business success.
What do you measure?
Innovation means constantly looking for new and improved ways of creating and delivering your product or service. Given that very dynamic reality, it can be difficult to identify what will be a meaningful goal to drive and assess your progress toward your desired business goals. It’s akin to shooting at a moving target.
The key question to be answered is “how do I/we define success in our business?” For example, what are the key elements/activities of your business that truly reflect success….is it your internal rate of innovative development? Is it the level of customer acceptance/adoption? Is it the rate of responsiveness to new developments in the competitive marketplace?
How do you measure it?
Once you decide what it is that you need to measure, the next step is to identify how you go about measuring it. This is the spot where many organizations often get into trouble in the goal setting process. There are two common dilemmas at this juncture…identifying a meaningful metric that will permit you to assess progress on your goal(s) and, equally important, ensuring that the metric data is accurate, readily available, timely, universally trusted and that it actually will be useful to you and others in your organization when making important business decisions.
Defining a meaningful metric, once again, has to do with how you define your goal. To use a simplistic example, let’s say for argument’s sake that your goal is to make people happier. In order to find a way to assess your success toward this seemingly nebulous goal you must first define what you mean by “happiness.” Is it the number of customer smiles per minute? The number of daily positive customer feedback comments?
Once you have identified a meaningful metric definition you must then determine if there is an accurate, immediate, reliable way of assessing something such as the number of smiles per minute. And, presuming that you have a methodology for collecting that data in real time; will that information be used on a regular basis to make critical business decisions that help propel you toward your goal achievement?
How frequently do you measure it?
Integral to the question of how you measure progress toward your goal is the issue of how frequently you need to measure/collect the metric data. When you are operating in an innovation driven environment your ability to instantaneously collect, analyze and formulate a response based upon your goal metric is essential. The key issue here is identifying your key decision making intervals (e.g. momentary, hourly, daily, etc.) and determining whether you can accurately guarantee the availability of your metric data to match that need. For example, if you have a key strategy meeting each morning but your data is not available until the afternoon, then what is the actual benefit of that particular metric data?
Some additional considerations with regard to the frequency of measurement data collection include whether the metric data collection can be automated or if it must by collected “by hand,” the consistency and reliability of the data (if it is being collected by a person you introduce some potential variability), the extent to which the data is made available to all key decision makers and the extent to which those decision makers trust the data and find it useful in making crucial operational decisions.
Operating in today’s break-neck paced, increasingly competitive and ever evolving workplace requires all businesses to be nimble in their goal setting and progress evaluation activities. When you factor in the additional element of participating in an innovation driven environment you must be prepared to operate in perpetual motion…assessing your operational and competitive landscape moment-by-moment, having confidence that you have your eye on the right targets and that you are equipped with the necessary information to outmaneuver your competition.