A lot of the work I have done over the last 20 years has been focused on measurement and outcomes. Whilst my background maybe finance, there has been a genuine realization that financial outcomes are purely a result of activity within the organisation. Therefore, the true gain is made when a correlation or connection can be made between an activity (cause) and an outcome (effect).
In many of the case studies where we have managed to turnaround an organisation, or improve a situation, is where we have gone beyond the outcome, identified the potential activity, and put our focus around that. This simple approach has created improved financial performance, better understanding from leadership, better engagement of staff, and improved service to customers and stakeholders.
I guess a very simple example is to consider the chain of sales. More money in the top, expectations of more money out of the bottom in the form of profit. How do we get more sales? Well there are lots of ways, and every person involved in managing sales, growing sales or consulting on sales will give you their formula for success. But ultimately it will come down to either more customers, or customers buying more or paying more that will drive these results, and both these will be achieved by doing something more or different to what is being done today. Monitoring those activities be they sales lead generation, business development activities, marketing, product development, or internally looking at leadtimes and customer services, will ultimately create a focus on the activity (cause) that will stimulate your increase sales outcome (effect).
So if the simple question are, “How do we get more Sales?”, “How do we reduce cost?”, “How do we make more profit?”, put the focus into the activities that drive the successful outcomes, understand the correlation with success, and then align your organisation behind those activities.
It’s not new, it’s not rocket science, and it’s not special. However, I can guarantee you that a large number of Board meetings give a disproportionate amount of time to only looking at “Outcome” measures like Accounts, and not enough focus on learning about their success by looking at “Activity”. I can also guarantee 100% of them will want more outcomes.
If you need help looking at Cause and Effect in your organisation, get in touch. You’ll be surprised at the potential that exists. You can find out more on our Performance Management services here.