My thanks this month to friend and colleague Dan Barnett, chief operating officer of the TEC (The Executive Committee) International in San Diego. We’re going to use Dan’s report to illustrate how "dashboard management" can change the way you "walk the talk" in your business.
Let’s get our arms around the concept. Just imagine driving west on I-94, cruising along at 70 mph. Every once in a while, you pull into the passing lane, accelerate past 70, check your speed, scan your dashboard and press on.
You probably pay attention regularly to a few instruments such as the speedometer, fuel gauge and maybe your CD or radio volume. The others, like the oil pressure or water temperature, come into play only if there’s a problem.
At any given point in time, everything you need to know about managing your car and its systems is right there in front of you.
We’ll fast forward to every Tuesday morning at TEC International headquarters. The entire management team gathers for the weekly operational dashboard meeting. It lasts for precisely 30 minutes. At the meeting, the dashboard, consisting of 10 key elements in TEC’s value chain, is presented.
Two key aspects to dashboard management make it work: manage those activities that drive future results and hold people accountable for ensuring that those activities happen.
Back to the 30-minute meeting. In TEC’s case, 10 key elements drive revenues. A senior manager was assigned to one or more of these metrics. During the meeting, the responsible managers report on their key elements such as receivables days outstanding, new customer bookings, existing customer retention, inventory turns and so on. In short, the key elements are related to sales, finances or operations.
As Barnett states, "The beauty of this process is everyone on the management team knows exactly where we stand, in terms of our key metrics." There are no surprises, because this information is being reported each week.
During the meeting, it’s critical that the management team sticks to the facts and nothing else. This is not a problem-solving exercise. It’s designed to get everyone staring at the same instruments on the dashboard, and taking in the readings that describe the business at that point in time.
So what happens if it becomes apparent that some elements on the dashboard are off track, heading south? Barnett introduces the concept of "Tiger Team Problem-Solving."
A tiger team is immediately formed around the dashboard element that is not where it should be. They hold another meeting of no more than 30 minutes. It’s a brainstorming meeting, designed to give the manager responsible for the problematic element input on how to get it back on track.
One week later, the manager must report back to the tiger team what steps have been taken to improve the situation. This is management accountability at its best.
The essence of dashboard management is to determine how your value chain drives revenues, and as Barnett says, "manage the activities that cause results to happen." This might sound basic. But the clue here is to identify every activity necessary to produce a sale and then to assign a cost to that activity. Add up the activity costs compared with the actual sale. Track them and make them key components of your dashboard management review process.
Here’s a simple example. Let’s suppose that the model for your business says that it typically takes 30 customer touches to consummate a sale (phone/ email contact, personal visits, letters, voicemails, newsletters, etc.).
A dashboard report shows that your average customer touches have fallen to 20. A tiger team would be formed to brainstorm the reasons for the decline in customer or prospective customer touches. The responsible manager would then act to improve this aspect of the sales activity.
Let’s summarize how you can make a dashboard management system work. There are five essentials here, and you must commit to a management process that abides by each essential:
Make it mandatory. Everyone must show up at the weekly "report in" 30-minute meeting. If necessary, start it before normal work hours.
Start and end on time. Don’t let the meeting drag on longer than half an hour because of explanations of this and that, or whatever. Get the report on the key elements that define your business and be done with it.
Stick to reporting only. The 30-minute meeting is just like a newscast that we watch every night on TV. Managers present their data, respond to clarification questions only, and that’s it.
Take immediate action. The fundamental premise behind dashboard management is that once a deviation is detected, action is taken to immediately improve it. This is a weekly or, at worst, a biweekly event due to tiger team perseverance.
Hold people accountable. This process guarantees that responsible managers cannot avoid their responsibilities. It’s one thing to review stuff that happened for the past month or quarter. It’s another thing to be accountable on a week-to-week-basis. Dashboard management says "Look at the here and now, and make quick incremental adjustments going forward."
There’s another piece about dashboard management that may be obvious. It can trickle down to a department in your company, to a specific work team, to a field sales group, and so on. Each unit can develop its own elements of dashboard scrutiny, report on them weekly, and use the same tiger team approach that is used by senior management.
Until next month, keep your eyes on the dashboard.
Harry S. Dennis III is the president of The Executive Committee (TEC) in Wisconsin and Michigan. TEC is a professional development group for CEOs, presidents and business owners. He can be reached at (262) 821-3340.
