31 Dec 3 Ways to Successfully Manage the Big Picture
As a manager, you always want to have a view of the ‘big picture’ of what’s going on with your business. That is, you want to see the zoomed-out view that has every moving part and how they work together. Easier said than done.
Sometimes, the big picture view you have can obscure what’s actually happening. Here are three steps towards creating measurable, actionable, and informative big picture views.
Set Reasonable Thresholds
Everyone wants to see lots of green on their reports, lots of positive numbers and hit targets. Some folks chase these green numbers and game their system so that those acceptable thresholds are easy to hit. That just defines success downward and opens you up for systemic failures.
Take a hard look at the historical numbers for your important KPIs. What were your best and worst periods? When were there problems? When were you growing and succeeding in a way you felt good about? Use those numbers to set your thresholds. Don’t hold them as hard and fast; if you find that you are consistently above a threshold, consider changing it. Sure, your company might just be that awesome, but maybe you need to aim higher.
Ensure, too, that the threshold types you use make sense for the KPI performance that you are tracking. Commonly, KPIs fall into three color-coded categories:
- Green – Performance is good, no problems to address.
- Yellow – Below acceptable, but might not be a problem. Keep an eye on it.
- Red – Unacceptable. There’s probably something wrong.
This isn’t the only way to use thresholds. Some KPIs, like the sales numbers for individual sales people, might have an acceptable threshold and an exceeding expectations threshold that comes with additional bonus incentives. You might want some KPIs, like training budgets, to stay within an upper and lower bound, where its performance isn’t acceptable above the upper and below the lower bounds.
Basically, what you’re doing is strictly defining what ‘good’ and ‘bad’ mean to your business. And your big picture lives and dies on whether you can view how well your business and its key indicators are performing.
Identify the Roots of Performance Problems
Now that you have a sense of what good and bad performance looks like in your business, what do you do when something drops into the red? There’s two categories of causes: those that repeat day-to-day because they arise from a process and those that occur sporadically because they arise from outside forces, like equipment or raw material failures.
A process problem will reveal itself through a KPI that is consistently below acceptable levels. It’s a problem fundamental to how that business process works, so you’ll need to modify it. Process problems can be triggered by outside events, but they’ll stick around. For example, suppose you’re selling cars and you find sales drop and stay down for a few weeks. The cause could be that you’re trying to push one model that is no longer in vogue. Or there’s street construction that makes your front entrance less trafficked. Whatever the specific cause, you’ll need to adjust a business process in order to get back to your previous performance.
An outside problem will look like a sudden drop, but will recover when the problem is removed. Weather and natural phenomenon fall into this category – you’ll get less foot traffic in a snow storm. Other outside problems are more controllable. Say you run a print shop. When a machine breaks down, productivity – and therefore revenue – will drop. You don’t need to change your process, you just need to address the problem as soon as possible.
What about combinations of causes? Let’s look at the print shop example above. Suppose that you get machine breakdowns happen in a reliable pattern, every few months. You may have to consider changing print machine suppliers or limiting how much machine uptime you have.
Link Your Numbers to Your Goals
Your KPI numbers never exist in vacuum; they are part of the history of your business. And that history tells a story – you started somewhere, grew, faced challenges, and so on. As an active business, you are writing the middle part of your story. The end of the story – where you are going – is defined by your goals. You should always be shaping and adjusting the big picture of your business so that it looks more and more like those goals.
Your ultimate goal might be something huge and difficult to measure. Let’s face it, if a goal is any good, it’s going to seem pretty massive from your current state. Create milestones, smaller, achievable goals that you can reasonably hit within a year or so. Break these down further until you have a clear picture of what your story should look like in order to match your goals.
Because you’ve already put the work into having reasonable thresholds, you should be adjusting your thresholds in order to push you towards your goal. If your thresholds always stay the same, your business is going to stagnate. You’ll be able to better allocate resources if your KPIs show not just current performance, but the performance that you want in the future.
Your big picture will composed of numbers. How you track, measure, and compare those numbers will determine whether your big picture clarifies your business’s performance or obscures it.