Are you getting the most out of your money you put aside as saving every month? How much are you getting in returns for every dollar you put aside?
One day, my insurance agent Phebe called me to shared with me an insurance plan that can gives me the best leverage I can ever get in the insurance market.
I said, “huh? What you mean by best leverage?”
She explained, “for every dollar you put aside to save into this special account, you can entitled a X dollar worth of Insurance coverage PLUS a Y% interest earn on that dollar amount.”
Wow ! This is truly a case of stretching the dollar to work hard for me ! A clear case of Optimizing the Dollar to get the maximum returns possible.
So, what is Business optimization in a nutshell?
Resources are scared. How best you allocate your resources to optimize their return is both an art and a science in the business world.
In other words, how hard you can make your resources work for you to give you the maximum returns possible. And in the world of Business, optimization is just about tightening every resources you got to make them work 48 hours a day to produce maximum output if that is possible.
So, why is Business Optimization a hot topic in corporate world?
3 Reasons why it is a hot topic in profit organizations.
1) Business want to be more profitable everyday
2) Business has not willing to invest more until they exhaust the current resources.
3) Business is threaten by fierce competition over shrinking market size.
There are many strategies to optimize your business. But today, we are not exploring what are the best strategies and so on. Simply because every business has its uniqueness and every business is different.
But what I like to share with you is no matter what business you are in, there are always these 3 key elements that can helps you to achieve Business Optimization.
So, which are the 3 key elements that drives Business Optimization?
Out of the many elements a business consultant can tell you that drives BO, I have chosen 3 which I personally felt strongly about. Here you go, they are:
It’s all about your team’s final output. The higher the productivity, the better you are utilizing this resource.
Business managers define KPI metrics to measure productivity to ensure they fall within a tolerance levels.
How lean and mean your team complete their task at hand? If your team needs to complete 20 tasks in 1 hour, are they achieving it consistently? Once again, we may need KPI metrics to track team’s efficiency in completing task, because they have direct impact on your overall productivity.
By being efficient at completing task, does not guarantee you are effective in generating the desire outcome. Most people in organization failed to understand this crucial differentiation between Efficiency and Effectiveness. We need more managers who are Effective-Driven instead of just Efficient-Driven.
Best case scenarios is you are both a Efficient and Effective Driven Manager, that’s where your productivity is almost a sure bet.
We mentioned about KPI metrics that can help you to keep track and measure the above key elements for Business Optimization, so how do we go about actually doing that ? Is there a tool to help us?
Yes, we need a tool to help us to track
What you need is a Dashboard Reporting tool that can help you to summarize and visualize the KPI that you are tracking to help you define your next course of corrective action if there is a need.
I remember how I use Dashboard to tighten loose ends to make our business more productive
Initially when I took over the position as the Manager of the Sales & Marketing team, we have a big problem. The problem we faced is we don’t know what is the problem that is preventing us to achieve our sales target.
Defining what to track by itself is a major challenge. Eventually, after much discussion and debates, we finally agreed to keep track of 6 KPIs that will measure our effectiveness and efficiency in our online advertising campaigns and our rooms production.
But, our data are all stored in spreadsheets in table format that makes it hard to digest and let alone analyze them. So, later, I came to learn about building Dashboard using Excel as a tool to visualize these valuable information on hand.
Dashboard helps alot for allowing me, as a manager to efficiently collect data and present in graphical way for us to make effective decision. From that day onwards, the entire department and management start to rely on using Dashboard as part of the default presentation tool during weekly meetings.
So, how to create Dashboard?
Most organization prefer to build their own Dashboard using Excel software. It is easy to create and maintain. But there are also commercial tools that helps you define your dashboard, but I personally feel that Excel is more flexible and no extra cost of acquisition.
But, dashboard is just a tool? How can it help me to optimize my business?
That’s right ! Dashboard is just a tool, what is more important is the way you define what KPI you want to track. And in order to define what KPI to track, you need to ask yourself which Productivity, Efficiency and Effectiveness metrics you really wanted to monitor that can contribute to optimizing your business.
Once you have a clear picture of your KPI, then only you build your Dashboard to visualize your information. Without a Dashboard, you won’t be very efficient to make effective decision!
Visit http://www.francischin.com to learn more about the 7 Steps in defining your KPIs and building a Business Dashboard that can help you to optimize your business.