Better profits come from better measurement processes...

On the back of 4 meetings with managing partners this week it's crystal clear to me  the power of getting close to your numbers - and I mean really close.

Two firms are forecasting substantially improved profits for their coming financial year because they have made good business decisions. Good business decisions based in high-quality management information. Not just financial measures but a blend of measures demonstrating the overall health of their firms.

Another firm is instantly seeing what could/should be done with their pricing model because they've got closer to the profitability of each client's job. And the fourth can see who in their firm is elligible for performance bonus payments because of the profits each manager has brought to the firm.

I'm sometimes nervous about asking partners about how they monitor and manage their KPI's - because they are the numbers experts. But 9 times out of 10 there's significant improvements to be made to the measures they track and the way they respond to their measures. Improvements which almost always improve their understanding of the big issues in their firm and improve the decisions and action planning that follows.

Are you measuring what you should be? Are you using your measures every month to make decisions and plan your next actions?

The best book I've found on this subject is by Ron Baker it captures the BIG issues of measuring what matters to your customers (mostly lost in most firms!) - http://www.amazon.co.uk/Measure-What-Matters-Customers-Predictive/dp/0471752940/ref=sr_1_1?ie=UTF8&s=books&qid=1273312526&sr=1-1

I'd love to here your insights, your questions and your lessons from this jugular part of business leadership.

Paul

www.remarkablepractice.com

Comments

Thanks

Anonymous | | Permalink

Thanks Paul - A good posting I also like the link to the book. I will read when I next month.

KPI monitoring

Julie Payne | | Permalink

I found Ron's book very good as a starter and it has a specific chapter in there with examples for professional service firms.   In addition to this I would like to recommend David Parmenter's book - Key Performance Indicators: Developing, Implementing, and Using Winning KPIs.

It looks further into what a KPI is, KRIs, Performance Indicators for team performance and Result Indicators; and how these link into the business strategy and critical success factors.

paul shrimpling's picture

great book recommendation....

paul shrimpling | | Permalink

Thanks Julie,

I'll investigate the book. And thanks for your comment.

Paul

-- remarkable practice... inspires remarkable results

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