There are numerous executive management teams who claim to know with absolute clarity where they want their business to go. They know their destination.
And yet, while making this claim, that seems legitimate and necessary for any corporate leader, too many executive teams still lack a good GPS system that accurately tells them exactly where they are NOW!
My case today is that if you, as a business owner or manager, think you know where you want to go but don’t know where you are right now, there is no way to achieve your objectives.
To achieve your business objectives or any other life goal for that matter, you must first know where you are.
Now some managers will say they know where they are. For example, one owner told me that he managed his business for 25 years and it has always been profitable until the past 2 years. He wants to restore a profitable operating environment.
But when I asked him the specific reasons for his company’s move to unprofitable operations, all I heard were 20,000 foot rants about new competitors, changing expectations of customers, struggles to find good people etc. He couldn’t get down to the nitty gritty reasons that were the root causes of his profit failure.
A GPS system is typically defined as a network of satellites that are coordinated and send precise details of position, speed and location to a set of receivers that are used to identify the exact location of a vehicle.
But in today’s business environment, I propose we define a business GPS system as a large array of disparate data silos which are connected to a receiving system or (BI) business intelligence platform that can bring all that data into a coherent format and precisely identify the root causes of critical business activities.
The right BI platform or business GPS system can tell a corporate management team exactly where the business is, right now, and enable tracking of every critical business decision to ensure the enterprise arrives at the planned destination.
The challenge is that there is no predetermined route to reach the destination in the business world. The actual route to achieving business objectives must be adjusted on the fly to meet competitive threats and unforeseen account level market dynamics, such as identifying unproductive SKUs, optimizing inventory levels and adjusting the timing and levels of trade and promotion spending to name just a few. These daily business activities and many others must be rapidly accessible to all managers to ensure the destination is achieved.
The right BI system embraces the curiosity and intuition of the entire management team and integrates those insights with vast data sources that provide the true intelligence necessary to consistently make fact based decisions and achieve enterprise objectives.
When you implement the right GPS or BI system, the following are some of the common characteristics:
• Makes the calculation of activity costs and revenues from the smallest transactions throughout the retail supply chain;
• Has the capability of measuring productivity;
• Can integrate data from all sources and doesn’t lose computing speed as the scaling up process takes place across large enterprises;
• Capable of allocating overhead and “off transaction receipts”;
• Operates within the context of classic constraints such as shelf space, man hours, capital and staffing headcount;
• No sampling or statistical modeling needed because all transactions are available to the system and users;
Implementing a BI system with these types of core characteristics enables a continuous improvement culture, where all management decisions are observable, results of decisions are tracked, outcomes are evaluated, and accountability and rewards are integrated for results achieved.
This type of business intelligence (BI) platform enables the enterprise to have a true GPS system that provides precise tracking of where the business is today and the ability to adjust to real-time market conditions to arrive at the planned destination.