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Jans Corner: Measure what you Treasure!

In a world where attention is on short-term profits and obsessively tracking the financials to achieve good quarterly results, we often times forget that there is superficial data and then there is meaningful data.

Because we tend to pay attention to – and treasure – what we measure, smart companies and teams turn it around and measure what they deeply treasure and what leads them to success.

Which means that they look at, quantify and measure the important and meaningful indicators in their business and allow a large enough horizon for seeing results and making decisions. Obviously, this does not mean forgetting the financials. Tracking and reporting revenue and profitability measures is not only useful but also required for economic survival and keeping investors – and the tax authorities – informed and happy. Now more then ever, this is, though, clearly not enough. Financials provide not just limited and distant but also a rear-mirror view of the business – it’s like playing football and being fixated on the scoreboard. You may accurately know how many goals were scored before but lose sight of the ball and the dynamics of the game – the flow of resources and activity.

To increase flow of resources and activity in the business, it is important to know why we are here (we know that profit is not the reason – rather it is the means to keep us in the game), what really constitutes success for the business and how things  work and are interrelated to make success happens sustainably and efficiently, so that we can pay attention and measure the right things all along the way.

W. Edwards Deming, the father of modern total quality management and great contributor to the post WWII rise of Japan as an economic power through its high-quality manufacturing, referred to conventional measurement as “tampering”: manipulation without genuine understanding.

We know that this genuine understanding requires patience, eye for detail, and analytical mind as well as systems thinking – grasping the underlying dynamics of the systems and seeing how the processes underlying everyday performance work.

In Talent Dynamics, we say the best person to make sure that systems and processes are measured and managed consistently and precisely is a Lord profile. Lords naturally exhibit the above characteristics and observe to understand and learn from what they see and what the data tells them. If they are tuned in to the overall success of the business and left to make their own data analysis and conclusions, they quietly ensure that existing assets are best utilised and closely monitored and that resources – material, information, and financial – are allocated and flow efficiently.

Who in your team and business is best suited to be put at the helm of this? Who could actually not just do it well, but also enjoy it?

Interestingly, just as the Japanese business miracle has shown some years ago, you may experience that this improved flow of activity and resources will generously show also on your financial statements too!

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