Posted tagged ‘operations’

Types of Measures

February 20, 2009

There are three types of measures:

1. Activity measures

2. Output measures

3. Impact measures

Activity measures tells us how efficiently something was done. It answers questions such as:

  • How long does it take?
  • How productive is the department?
  • How many resources were used?

It focuses us on internal tasks, timing and resources but it is NOT about outcomes. As an example, profitability is an activity measure because it relates incoming revenue to internal operational costs. It measures the efficiency within which resources are utilized to produce income.

You’ll find activity measures are usually used with internal operations groups and frequently these are the measures used for multiple phases of processes

Output Measures emphasize the results of the work rather than the work activities themselves. Outputs tend to be physical products, services and communications that one group sends to another. These types of measures answers questions about what has been produced such as:

  • Does the product meet quality standards?
  • Was the product sent on time?
  • Was the product delivered on time?
  • Was the customer satisfied?

Output measures are about products NOT about production. They gauge quality, timeliness and evaluation by the CUSTOMER or USERS and therefore the measuring source is usually outside of the group producing the output.

Customer satisfaction is an output measure that requires obtaining feedback from outside the organization (this can be a customer internal or external to the organization.) Most output measures are using internal standards. These measures are useful when you are interested in whether the results meet certain standards.

My personal favorite is the last of our set and the one the President and our legislative leaders truly want to cause.

Impact measures ALWAYS require feedback or customer research to develop meaningful measures. So what is the difference between customer satisfaction measures and impact measures?

Customer satisfaction measures what the customer likes. Impact measures what the product does for the customer. It is all about value.

Impact measures answers questions such as:

  • Does the product make the customer more productive?
  • More successful?
  • Do the services make the customer more effective?
  • More influential?
  • Do the products help the customers reach their goals?

These measures require serious examination of the customer because there is no other way to get information about the customer’s productivity, success measures or goals without their input and evaluation.

Most important it shifts the focus to “What do you need from us to help you succeed on your own measures of success?” This type of measure alters relationships and makes what you achieve more valuable.

It makes you realize exactly what is the point of what we do.

What I’m Telling My Clients – Part 2 (or how they can create their own economic stimulus package)

December 23, 2008

So what would a client referral meeting look like?  Here’s one possibility.

The underlying context to this meeting is the recognition that the greatest challenge that any business owner faces, particularly in these challenging economic times is to drive new business to the company. The second greatest challenge is to fix a problem or capitalize on an opportunity that they might see but don’t quite know how to address.

Each of these referral meetings would last an hour. Only a small number of clients, perhaps six to eight clients, would attend each meeting. Ideally, they would have complimentary businesses.

Each client would  discuss

  • What values his or her company provides,
  • Its ideal client and
  • A particular problem or opportunity that it is facing.

The idea is to try to get each a client new business via referral or find them a company that can help them meet a pressing need or opportunity.

That’s the whole agenda.

The only thing that is required is that each company approach the meeting with a mindset to offer a warm referral to any of the companies represented in the room. By doing so, this gathering of leadership would create more growth and value.

And each company will get more business and / or be able to grow its business more effectively.

What I’m Telling My Clients – Part 2 (or how they can create their own economic stimulus package)

December 18, 2008

As the bailouts and their discussions whirl about us and as the list of companies laying off or employees or shutting down operations grows longer and longer, I began to wonder if there wasn’t a small business version of an economic stimulus package that could be implemented.

And if there was a version of economic an economic stimulus package for small businesses, who could and would provide it?

It appears to me that there is such a “package” out there and the ones that can provide it may be small business themselves.

Arguably the greatest challenge that any business owner confronts, particularly in these testing economic times, is to drive new business to his or her company. Fundamentally speaking, as it always has been, the key to long term growth is to “grow the pie” and attract more business. Provide more appropriate services that make a difference and you will earn more business and a greater share of the customer’s wallet.

Many companies provide services to organizations and businesses that are in related fields. Others provide services to companies in a wide range of industries. What if, each company leveraged its customer list to grow their clients’ businesses?

Imagine, if you will, a meeting of six or seven of your clients who work in one industry but provide different services within that industry. More than likely, each of these clients knows other companies within the particular industry. Because each of these companies is your clients, you are related to them and a reservoir of trust has been established.

Suppose next that each one of your clients attending this meeting was asked to participate with the intention of referring one of its customers to one of the businesses represented in the meeting. The economic impact of these referrals would be profound.

Referring clients to one another would create a reciprocal relationship built on real economic value. Additionally, in effect, because your business would be in the upper parts of the minds of your clients, the number of people selling and promoting your value and services would grow geometrically as the trust that you have demonstrated in them would be returned in their discussions with their clients.

In a short time, you might discover that you have an army of salespeople selling your value.

In the next post, we’ll take a look at the structure of such a meeting and how to make it work for you.

In the meantime, please write and share some innovative ways you are growing or helping others grow their businesses.


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