By Martin F. Stankard

Basing management decisions on information and analysis raises payoffs and lowers risks. Baldrige Award winning firms ensure their prosperity and minimize risk by concentrating 80% of their data gathering and analysis on leading indicators of results.

When a Baldrige examiner asked the sales manager of one award winner what measures he used to manage the selling process, the manager replied.

"Every day I look at the number of sales calls completed, the number of price quotes we made, the number of quotes accepted, the number of lost opportunities, and the reason for each loss."

The examiner said, "You are the first sales manager I have met who doesn’t claim to measure sales."

The sales manager replied: "I don’t manage sales, I manage the sales process. Accounting reports sales results monthly and the management team reviews sales quarterly."

This sales manager had doubled sales in two years.

Analysis finds leading indicators of results by arranging facts to reveal patterns that say not just what has happened, but lets you test theories of why it happened. Once your theory explains the facts, you can use it to predict and control what happens in the future. Finding factors that drive success –leading indicators – lets a firm raise its success batting average and avoid failures.

For example, a high tech company wanted to boost its project success rate. The team responsible mapped the as-is process and identified 155 factors believed to drive success. They gathered data on all 155 factors from 20 successful and 20 unsuccessful projects. When they looked at the patterns in the data, they found that only 12 factors out of the 155 correlated with success. The remaining 133 factors were confusion factors -- doing badly on them hurt project outcomes, but doing well on them did not ensure success.

When they looked at the 12 success factors carefully, they found that they only managed six of them. No one was accountable for the other six. By bringing all 12 factors under management control, project success rates jumped immediately. In the next year, they doubled the number of successful projects with the same staff level.

Martin Stankard, President of Productivity Development Group, Inc. has helped dozens of clients base process improvement decisions on analysis of fact. Productivity Development Group, Inc. seeks to give every client the insights and tools they need to ensure their prosperity.