Measurement and reporting

Posted on 02/09/2010

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Bit of a ramble this week on the topic of measurement and reporting. A thread of several half finished blogs, that hopefully put together make some sense.

Let’s first start with farming, and the concept of efficiency. You often hear that large farm companies are more efficient then smaller farmers. And that is true if you measure the amount of money it takes to produces pieces of corn. That is a measure of output/cost. If you switch the frame to think about how much food can be produced by surface area of farm land, a small farmer will win every time. The small farmer will make much better use of the land, to plant multiple crops, varying the crops over the season and likely keeping the land in better shape for future growing without the need for chemicals.

The famous business guru Peter Drucker states: “What you measure is what you get”.

And in this case, if your measure or your constraint is cost, then for sure the big factory and the big farmer model will win. Now if you constraint is land it will be an entirely different answer.

This is something that you face every day, in the reports you read and the actions you take based on the measurements you make. Those metrics are very powerful and drive a lot of action and behaviours.

Welcome your thoughts and questions.

Cheers, Steve

Suggestions:Books: Napoleon’s Glance, Duggan. A really interesting account of strategy from a professor at Columbia university. He traces historical events and when and who have moments of great strategic thinking. Music: Nothing much lately, happy for some suggestions, in a bit of a repeat music mode on the iPod.

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Posted in: Business, Strategy