Analytical tools

Executive teams need to make informed decisions and to be sure these are having the desired effect.

This requires both a summary of each major issue and regular, rapid access to trends in underlying performance. But analytical tools can be 'executive-unfriendly' and detailed data confusing and misleading.

We worked with a group with 20 operating units, each reporting a wide range of performance data weekly. Performance can be highly volatile, well ahead of target one week then behind the next. Too much data meant management action was also volatile and occasionally counter-productive.

We put in place an Excel-based tool for use by managers and executive team, allowing them to focus attention on the real performance problems. Performance against their key business measures improved significantly.

The problem

Week to week data can be subject to a lot of 'noise' or variation, making it harder to spot trends and to decide when to take action - and more importantly when not to. Monitoring 10 types of data for 20 operating units is time-consuming.

What we did

We applied statistical process control techniques to define limits that triggered management action or, more importantly, suggested inaction. We developed trending to identify poor, and worsening, performers and to point to the main areas of variation. We then developed predictive trends, to forecast the likely year-end outcome at current run-rates and to compare this to targets.

We embodied these techniques in a simple database tool that allowed managers rapidly to compare operating units and performance trends.

What happened

The company gave the tool to their senior operational managers, updating performance data each week.

In combination with an informed action plan, the increased clarity and availability of data led to a large improvement in performance against the two main operational measures and the identification of a number of seasonal factors which have now been addressed.