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Strategy, Lessons Learned and KPIs

January 05, 2011
manageprouser

Strategy usually gets a big benefit from accurate hindsight and lessons
learned.  By-the-way, what did you pay for the lessons learned in 2010? 

If someone delivered the “lessons learned from 2010” to you in a folder…
and you looked at the cost of those lessons as a sum of unexpected costs
and the delta between projected and actual sales in 2010, would you feel
like you paid a fair price for the lessons learned?  Did you get a good deal?
Or do you need to dig deeper into this past year to get more value for
the dollars spent, the dollars that never came in?

One of the ways I get more value from what happened in the past
year, and turn those experiences into “lessons learned” is to view
it as a reverse engineered KPI (Key Performance Indicator).
Let me explain, its a fairly simple process.

First, look back at the last year and split the effort spent into two
buckets; one bucket is the development of products and service,
the second is your customer life cycle, from prospects to long term
customers and drop outs.

Second, take either bucket, let’s take customers, and imagine that the
past 12 months was intentional and focused on creating exactly what
your results were.  It’s a form of reverse – engineering and it sounds
something like this:

“Last year we were successful in accomplishing… ” and then accumulate
whatever happened during the year and frame it as intended. In fact,
you’ll help yourself if you go even further and score it as a KPI that you
successfully achieved 100%.

To help your analysis, you might want to use Geoffrey Moore’s work in the
area from his book Living on the Fault Line.

It might sound something like,
“In 2010 we bet on operational
excellence as the best choice to
spend our resources on , and were
100% successful in achieving … (a loss
in sales, a flat year in sales, a 125%
increase in sales).”

You get the picture.  Once you frame it that specifically and intentionally,
it’s a lot easier to derive lessons learned.   You paid all that money
last year, you better get something for it.  And, your strategic thinking
in 2011 will be appreciably better, the more factual and aware you
are about what happened in the past year.  What was emphasized
in your organization and what the market actually responded too.

BTW, here’s a quick definition of Moore’s 4 quadrants:
1. Operational Excellence (differentiation based upon productivity and
     ultimately price)
2. Customer Intimacy (differentiation based upon matching customer
     expectation with offer fulfillment)
3. Product Leadership (superior design and performance)
4. Disruptive Innovation (create a new source of competitive advantage)

Also if you are struggling with examples of KPIs to use in looking at
2010 or for strategic planning in 2011, you can find a spreadsheet
of examples broken down by business type on our website at:
http://www.ManagePro.com/KPIsbyBusinessGroup.xls  

Bottom Line:
Before you start thinking about strategy for the coming year, think
about getting more value from lessons learned in 2010… a lot more
value.  Treat last year as entirely intentional, targeted on your
accumulative results as a KPI.  And then ask yourself was that
a choice that the market responded well too?  You’ll be surprised
at what pops up a lessons learned.  We all inevitably pay, the
question is did you learn anything from it.


1 Comment. Leave new

Data Mining…

People, especially businessmen, want to know about how to mine data in recent years….

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