Measurement – Measure what matters to the customer

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The Future Business Formula is my new book that provides insights into the changing landscape of business and how organisations can adapt to succeed.

In my latest blog in the countdown to the book’s release in May, I provide an overview of Chapter 12 – Measurement – and why you need to measure what matters to your customer.

Principle Twelve – Measurement

Formula 1 shows how data-driven insights can transform performance and risk management. Gathering real-time data through advanced telemetry systems has replaced subjective decision-making. Reliability has greatly improved, with Lewis Hamilton’s car experiencing only one failure in four years. Organisations must rely on real insight, not assumptions, to make informed decisions in the data-abundant world. Gut-feel decision-making is flawed; leaders need the right insights from data to drive change and improvements.

Are you measuring the right things in your organisation? I always tell me clients not to be fooled by ‘watermelon reporting’—green on the outside, but red on the inside, where the focus is on internal measurements that don’t reflect the real customer experience.

Insight is crucial to turn raw data into actionable solutions. Take an outside-in view to prioritise what really matters to your customers. By building analytical capabilities and event-driven architectures you’re able to unlock the value of data. To measure effectively, make sure you identify objective-driven factors that are consistent, predictive, and reliable. Beware of measuring the wrong indicators—test for predictability and repeatability.

Performance management should focus on value creation, not just the amount of work done. Traditional methods are outdated and fail to measure real value and align with strategic goals. They lead to adverse behaviours and poor performance. Rewarding your teams based on value drives purposeful work and a true meritocracy. A shift towards learning, development, and profit sharing is fairer and more effective. By changing the way your business measures and manages performance leads to better outcomes and employee satisfaction.

Balancing metrics is crucial for success. Chasing numbers without considering their impact can harm the customer experience. Targets can lead to unintended behaviours and failure demand. Instead of arbitrary targets, focus on trends and meaningful metrics. Measure productivity through throughput, predictability, responsiveness, and quality and empower teams to drive continuous improvement, letting the metrics guide them.

Some top tips to get measurement right in your organisation:

  • Measure value, not activities.
  • Make work meaningful and engage your workforce by rewarding shared success.
  • Don’t rely solely on experience and intuition; measure what matters to the customer.
  • Remember, not everything that counts can be counted – avoid becoming a slave to numbers.
  • Targets can be gamed, but trends can be improved through autonomy and innovation.

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More reading:

Read Principle One: Strategy
Read Principle Two: Customer
Read Principle Three: Alignment
Read Principle Four: Leadership
Read Principle Five: Culture
Read Principle Six: Talent
Read Principle Seven: Innovation
Read Principle Eight: Change & Delivery
Read Principle Nine: Simplification
Read Principle Ten: Organisation Design
Read Principle Eleven: Learning
More information on The Future Business Formula

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Written by Adrian Stalham
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