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Other Added - KPI Traffic Lights - 3 Ways to Highlight the Real Signals in Your Performance Measures
I remember when I began my first business. There were just not enough hours in the day. And this was true for each of the 7 days of the week. My daughter was only 3 months old when I started that business. I was not working outside of the home.I was now looking at needing time to be a mom to my newborn daughter, be a daughter to my two wonderful parents, be a wife to my husband, take care of the household and now run a business.Unfortunately, as is often the case, my business w
Approach 2: up and down, good and bad
When some performance measure values increase, it’s a good thing (like revenue, satisfaction and on-time performance). There are others whose values decrease and it’s a good thing (like rework, cycle time and pollution). Combine this with whe
Rick is a good friend and a client of mine. He owns a plumbing and air conditioning, as he has for the past 20 years. Rick expressed to me that every year he spends more and more money on his ads and every year they generate less response: when he called me he was frustrated and uncertain what to do about it. This guy’s at his wit’s end, and if you’re reading this article perhaps you feel the same way.Here Is What’s Been Happening:The advertising publicati
Approach 1: % difference from month to month
When this month is 10% worse than last month, the traffic light turns red. When it’s 5% worse than last month, the traffic light turns amber. When it’s 10% better than last month, the traffic light turns green. Obviously, this approach works for time periods other than a month, and for cut-offs other than 10% and 5%.
Such traffic lights encourage us, usually, to ask questions like “what caused such a big difference?” In turn, such questions encourage us, usually, to find some way to explain the difference. If we’re clever, we’ll already have added a comment to the performance measure explaining that the difference is due to something outside our control. If we’re not so clever, we’ll be putting up different explanations every month, and have a list as long as Santa Claus’ of improvement projects.
There’s no advantage I can see to this approach to traffic lighting. It tends to encourage us to knee-jerk react to data, tamper with business processes or blaming something we don’t have to do anything about. Time gets wasted chasing problems that aren’t there and we miss problems that are.
Approach 2: up and down, good and bad
When some performance measure values increase, it’s a good thing (like revenue, satisfaction and on-time performance). There are others whose values decrease and it’s a good thing (like rework, cycle time and pollution). Combine this with whe
In today’s competitive market, the ones that outlast and survive are those that can do more things and programs with lesser resources. This is why increasingly, we are seeing companies’ budget requiring a reduction in overheads and capital expenditures, whilst profits and revenues are expected to increase. Companies have little choice as the marketplace, the shareholders and the investors dictate this. As with eating, in company less corporate fats really does mean more.Carl
Such traffic lights encourage us, usually, to ask questions like “what caused such a big difference?” In turn, such questions encourage us, usually, to find some way to explain the difference. If we’re clever, we’ll already have added a comment to the performance measure explaining that the difference is due to something outside our control. If we’re not so clever, we’ll be putting up different explanations every month, and have a list as long as Santa Claus’ of improvement projects.
There’s no advantage I can see to this approach to traffic lighting. It tends to encourage us to knee-jerk react to data, tamper with business processes or blaming something we don’t have to do anything about. Time gets wasted chasing problems that aren’t there and we miss problems that are.
Approach 2: up and down, good and bad
When some performance measure values increase, it’s a good thing (like revenue, satisfaction and on-time performance). There are others whose values decrease and it’s a good thing (like rework, cycle time and pollution). Combine this with whe
Not all Business Service Companies should invest in advertising to promote their companies. But I thought all businesses must advertise to stay in business? Well not all of them and let me tell you why. Once you have a secured number of customers you may not wish to advertise because you cannot take anymore work or you do not want any more work.Take a mobile oil change business or a mobile fleet washing business as an example. One thing of note is that most of their business comes fro
There’s no advantage I can see to this approach to traffic lighting. It tends to encourage us to knee-jerk react to data, tamper with business processes or blaming something we don’t have to do anything about. Time gets wasted chasing problems that aren’t there and we miss problems that are.
Approach 2: up and down, good and bad
When some performance measure values increase, it’s a good thing (like revenue, satisfaction and on-time performance). There are others whose values decrease and it’s a good thing (like rework, cycle time and pollution). Combine this with whe
Just how do you become a $ millionaire in 365 days? Please do NOT follow a get rich quick or pyramid scheme. Instead, find a program that will take you step by step, in 250, yes, 250, separate lessons (called modules), on how to build a successful web based business that should make you over $1m in any one year. Trust me, you need to have your hand held through every process, including step by step written, video and audio tutorials. Whichever program you eventually choose please one that is
There’s no advantage I can see to this approach to traffic lighting. It tends to encourage us to knee-jerk react to data, tamper with business processes or blaming something we don’t have to do anything about. Time gets wasted chasing problems that aren’t there and we miss problems that are.
Approach 2: up and down, good and bad
When some performance measure values increase, it’s a good thing (like revenue, satisfaction and on-time performance). There are others whose values decrease and it’s a good thing (like rework, cycle time and pollution). Combine this with whe
Let’s say you’re on a sales call.And in the back of your mind, you don’t care. Which is not to say you’re apathetic. It’s just that you’re relaxed. With yourself. With your product. With your prospect. So, you “don’t care” insofar as you’re not negatively affected by the thought of failure.If I don’t make the sale, no biggie, you think. You do the best you can, be yourself, and if you close the deal, great. If not, it’s cool. Onto the next prospect!
Approach 2: up and down, good and bad
When some performance measure values increase, it’s a good thing (like revenue, satisfaction and on-time performance). There are others whose values decrease and it’s a good thing (like rework, cycle time and pollution). Combine this with whether there’s an upward change or downward change in actual performance values and you get a complex range of traffic light signals to deal with: upward change that is good, upward change that is bad, downward change that is good, downward change that is bad. This “solution” probably resulted from a confusion that erupted when upward and downward arrows were chosen as the traffic light symbols.
When we sort out the confusion, these multi-faceted traffic lights encourage us to ask questions like “what’s behind the trend?” and the trend is concluded from maybe 3 consecutive points of data. Marginally better than approach # 1, and only just.
Any system of traffic lighting that moves us away from point to point comparisons (the essence of approach # 1) is a step in a good direction. But we still risk drawing the wrong conclusions from trend analysis that is based on not nearly enough data to be valid. And does upward and downward really matter nearly as much as good and bad?
Approach 3: statistically valid signals
Statistical process control is an analysis method that discerns variation that is typical from variation that signifies change has occurred. It’s like filtering the signals from the noise, something the other two approaches don’t do (they assume that any arbitrary difference is a signal, irrespective of the typical size of differences ov
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