The third step in educating your management team has to do with the age-old adage, “You can’t manage what you can’t measure.” Management needs to get its eyes off the rear view mirror and focus on affecting what is going to happen. Management must learn how to dissect information and trends and make course-correcting decisions based on strong “business intelligence.”
Imagine driving your car, but only being able to look out the rear view mirror. How far, how fast, how certain and how smoothly do you think you would get in driving toward your goal? Management is trained to look through that rear view mirror (in the form of IT systems and their mountains of data). Although IT systems are great at helping understand what happened, they don’t tell us why they happened. Excel spreadsheets have become the manager’s tool for trying to figure out what happened and why.
Business intelligence (BI) software working within your IT systems can provide management with a dashboard of information about where things are heading, as well as specific insight into where things are not working. Properly defining the key performance/profit drivers of your business and then having a BI system to provide management with the correct course-adjusting information will provide the necessary tools that allow management to focus its time on insuring CSPA and maximum profitability for the company. It will serve as a strong tool to educate your management team about managing growth, profits and tomorrow’s opportunities versus what they do today (which is to manage yesterday’s problems and pennies).
The bottom line is that educating a management team in profit making requires a major shift in how most CEOs manage. It requires creating both a common focus among the management team as well as a strong understanding of a company’s key performance/profit drivers and what it takes to create and maintain CSPA. The result promises to dramatically improve profits and growth.