Measuring Success in Business

6 Key excerpts on "Measuring Success in Business"

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  eBook - PDF

  The Systems Thinking Approach to Strategic Planning and Management

  • Stephen Haines(Author)
  • 2000(Publication Date)
  • CRC Press

    (Publisher)

  2. Key operational indicators that represent the leverage points in the organization. 3. Customer satisfaction. 4. Profitability and/or retained earnings (organization’s financial viability). Key Success Measures (Step #3) or Goals 139 Many of you have undoubtedly heard of “The Balance Scorecard” concept. Its areas of measurement roughly match our four above. Why is this so? It is because organizations are living systems with predictable outcomes: we both see the same thing. To understand how these four interrelate, see the Key Success Factors Circle (Figure 8.1). In addition to these four factors, my experience and observations in both the public and private sectors have shown me an additional six areas of results that can have significant impact on the organization: 5. Innovative, quality products/services (TQM, etc.). 6. Productivity and efficiency (business reengineering of processes). 7. Physical and financial resources (resource allocation and management). 8. Manager performance and development/succession. 9. Social responsibility. 10. Environmental responsiveness. Some elements, such as organizational finances, are obvious and easy to measure. Though it is important and necessary to measure finances, it will not provide a complete, authentic organizational picture of success. Keep in mind that your vision has more outcomes in it than financial considerations alone. Other areas, such as FIGURE 8.1 Holistic view — key success factors. 140 The Systems Thinking Approach to Strategic Planning and Management employee satisfaction and customer service, can be complex and intangible, and require more creativity in devising ways to measure them accurately. M EASURE W HAT ’ S I MPORTANT , N OT W HAT ’ S E ASY It is imperative at this point in strategic planning to take the time to develop these measures.

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  Project Management for Research and Development

  Guiding Innovation for Positive R&D Outcomes

  • Lory Mitchell Wingate(Author)
  • 2014(Publication Date)
  • Auerbach Publications

    (Publisher)

  167 4 Measuring Success Measuring what is important during the course of a project increases the probability that the outcomes of that project are what is expected or anticipated. This chapter reviews: • Definition of project success • Types of measures and metrics • Necessity for governance • Types of trend and variance analysis • Types of technical reviews, methods, and techniques Measuring success ensures that the project is continuing down a path that is useful, important, is making adequate progress, and is leading to desired results. First, success must be defined. What is a successful project? Project success is more than the successful conclu-sion of the project within the scope, schedule, and budget. It can be highly subjective, but typically it reflects the alignment of the project outcome to the desires of the customer. As there are infinite permuta-tions of potential successful outcomes by project and discipline, it is up to the project manager to carefully define what will be seen as success in the eyes of the stakeholders. An overall success measure for the project will be chosen, and then incremental measurements will be identified that will be used through-out the project to keep it on track. Overall success measurements outline the customer’s interpretation of the terms of the “acceptable” project outcomes. It might be the implementation of a new process or service or the production of new products, for example. Incremental measures include both qualitative and quantitative assessments that 168 • Project Management for Research and Development are directly related to active management of the project, of keeping the project on track, and ultimately achieving the overall project success. Chapters 1 through 3 provided the basis for which to assess where a project aligns strategically and where it is positioned within its life cycle. Also reviewed were the methods and disciplines available to manage projects.

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  eBook - ePub

  Executive Engagement Strategies

  How to Have Conversations and Develop Relationships that Build B2B Business

  • Bev Burgess(Author)
  • 2020(Publication Date)
  • Kogan Page

    (Publisher)

  All objectives you set should be SMART: specific, measurable, achievable (not pie in the sky), realistic (not too easy) and time bound. The best way to think about the objectives for your programme is in three categories: building your organization’s reputation, strengthening its relationships with customers and influencers and growing revenues. Once you’ve defined what you want to achieve, in specific and not general terms, and with a clear timescale in mind, it’s time to set some measures of success so that you know you’re on track to deliver against your objectives.

  Measuring outcomes

  There is a balance to be had between tracking performance metrics that help you continually refine what you’re doing in your programme and tracking outcomes that your business leaders will care about. Traditionally, marketers running programmes such as executive engagement have done too much of the former and not enough of the latter.

  The knock-on effect of this focus on activities is that the marketing function is seen as a support function, not delivering strategic value to the business.

  Figure 10.1 shows a continuum of metrics you can measure, ranging from activity based (counting effort and tracking costs), through to more output based (counting results and measuring efficiency), to outcome based (reporting outcomes delivered and even anticipating and forecasting future outcomes).

  Figure 10.1 Moving from activity to outcome-based metrics

  SOURCE ‘Measuring What Matters to Improve Marketing Performance’, ITSMA, August 2019

  Figure 10.1 details The last three blocks are shaded with a caption that reads, ‘Marketing is a strategic function’. The blocks along with its features are represented by a nested list below.

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  Applied Marketing

  • Daniel Padgett, Andrew Loos(Authors)
  • 2021(Publication Date)
  • Wiley

    (Publisher)

  Why are marketing metrics in digital marketing still very unsettled? Do you think the metrics in use today will be the same in 10 years? Chapter Summary 13.1 The Process of Measuring Marketing Effectiveness • Well-executed marketing research and design programs follow a series of steps. • All marketing endeavors should be objective driven. • Tactical objectives, like any other objectives, specify how market- ing managers want the future to look in some way and must be very specific in terms of relevant target markets, the short time periods involved, and the degree of change in whatever variables are being used to measure tactical success. • Metrics for assessing success in meeting goals should be appro- priate and should meet certain straightforward criteria, such as being easily implemented and clearly understood. • Marketing managers should consider how useful data can be cap- tured and efficiently utilized into decision making. • Once data have been collected, marketing managers apply met- rics and interpret the results. 13.2 Measuring General Tactical Success • Marketing campaigns frequently have several tactical compo- nents operating at the same time. In addition to assessing the effectiveness of each part, marketing managers also want to know how the campaign is doing overall. • The first indication many marketing managers consider is sales figures. • The first metric, market share, is defined as the percentage of the total sales in a product category going to a particular brand com- peting in that category. • Relative market share is often used in conjunction with market share when marketing managers want to compare movement in market share for their brands against that of other competitors, often the market leaders. • The third metric, return on investment (ROI) is also a widely used metric of success and very frequently used to measure long- term strategic success.

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  Linking Customer and Employee Satisfaction to the Bottom Line

  A Comprehensive Guide to Establishing the Impact of Customer and Employee Satisfaction on Critical Business Outcomes

  • Derek R. Allen, Morris Wilburn(Authors)
  • 2002(Publication Date)
  • ASQ Quality Press

    (Publisher)

  CUSTOMER SATISFACTION AND PROFITABILITY Most companies express their business objectives in terms of profitability, market share, and growth. As an ultimate objective, profitability is a sub- stantive goal. It may be expressed at the corporate level in absolute mone- tary terms, as a percentage of capital employed, or in terms of total assets, according to Jain (1990, 225). The objective may be set for the corporation as a whole, or differentiated goals may be set based on customer segment, Key Business Outcome Metrics 95 business line, or specific geographic units such as sales regions. Optimally, profit goals are set at the same business unit level at which customer satis- faction data are collected. A number of profitability ratios can be calculated at the strategic busi- ness unit level. It is worth briefly describing several of these measures, since the manner in which profitability is measured can affect the models we develop. This is particularly important given our interest in linking cus- tomer satisfaction—directly or indirectly through retention and market share—to profitability. Since profitability can be measured in a number of different ways, a review of these approaches seems warranted. As noted, there are several different approaches to measuring prof- itability. These include profit margin on sales, rate of return on assets, and rate of return on common stock equity, according to Kieso and Weygandt (1977, 1026–28). The profit margin on sales is calculated by dividing net income by net sales for a given period, as shown in Figure 6.4. Note that net income may be calculated in either of two ways.

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  Transforming Corporate Performance

  Measuring and Managing the Drivers of Business Success

  • Michael Milgate(Author)
  • 2004(Publication Date)
  • Praeger

    (Publisher)

  This phenomenon is often crisis driven or, at least, driven by a fear of crisis, when the key is to allow strategic thinking to evolve. These points on strategically focused measurement were substantially addressed by the 1995 Renaissance Solutions survey of over 200 organizations on defining and managing business strategies. 2 The project also included forty personal interviews with senior executives. This survey made a telling observation: “Overall, the majority of management systems are designed around shortterm, controlorientated financial frameworks that are fundamentally tactical.” 3 It then cited five common factors of performance measurement in participant organizations: • Dominant financial or other backwardlooking indicators • Failure to measure all the factors that create value 4 • Little account taken of asset creation and growth • Poor measurement of innovation, learning, and change • A concentration on immediate, rather than longterm goals The report also revealed that, for business planning, targets were typically derived from departmental financial forecasts rather than from strategic performance drivers and the linkages between them. The report concluded: “Despite reasonably high level use, nonfinancial measures and targets are frequently treated in isolation from strategic objectives. They are not reviewed regularly, nor are they linked to shortterm or action plans—they are largely ignored or ‘for interest’ only.” 5 Page 5 SHORTCOMINGS TO BEST PRACTICE The broad shortcoming of performance measurement in contemporary business practice can be summarized as follows: • Measurement is an organizational preoccupation; the preceding references refer to excessive measurement, “flavor of the month” tactics, and metrics obsession hit the mark, with a tendency to overmeasure or measure for its own sake.

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