I recently did some consulting for two non-competitor clients in the same industry. As I was doing research for the second client I came across an excellent blog post that identified and discussed the fundamental performance metrics for their industry and forwarded a copy to the owner of each company.
The response from the 1st client, whom I had done a project for the year before, was a return email thanking me for the information and advising me that the management team was very familiar with these key metrics and had been collecting data and using them to manage their company for years.
The response of the 2nd client was also to thank me, but also to let me know that these metrics were all very fine and good but, who had time to collect all of this data when there were sales to be made, staff to be managed and product development to be pushed along? Their concern was that they were already so busy there was simply no time to spend on this kind of activity.
The interesting thing to me was the state of the two companies. While the 2nd client was seeking help to complete a stalled product development project; increase company revenues to at least meet the industry benchmark and find ways to escape having to make every single decision themselves; the 1st client had turned over most of the daily management of their growing company to a team of senior managers and was seeking funding to launch a new venture that would be a complimentary business to the first one.
Although many factors may have contributed to the differences between the two organizations, my experience leads me to believe that the investment of time and resources in understanding the fundamentals of their business and measuring and managing performance through the use of key metrics plays a significant role in the greater success achieved by the 1st client.
Would your business perform better through the active measurement and use of industry metrics as a management tool?