The Sage Wisdom series is produced by Victoria Fide Marketing with input and oversight from our leadership team and industry SMEs.
Scott M. Graffius is an agile project manager practitioner, consultant, award-winning author, and international keynote speaker in 25 countries. In 2015, Graffius founded Exceptional PPM and PMO Solutions and subsidiary Exceptional Agility, and has generated nearly $2 billion of business value in aggregate for Global Fortune 500 businesses and other companies. His organization provides agile project management consulting, training, and services to clients worldwide.
Graffius’ work on agility has a far-reaching impact on the business landscape. Not only are his pioneering thoughts on agility in project management crucial for leading organizations through a digital transformation, but his view on collecting metrics hit the nail on the head. “If you don’t collect any metrics, you’re flying blind. If you collect and focus on too many, they may be obstructing your field of view.” Defining quality and measuring success is a nuanced and often overlooked piece of digital transformation, but one that plays a critical role in the success of the project and the organization. In this article, we’ll discuss the importance of collecting metrics and how it can drive success in digital transformations.
The Importance of Defining Metrics
Digital transformation (DX) is a significant undertaking for organizations of any size, as it typically involves a major shift in technology systems and business processes. These changes can have a profound impact on people and require strategic change management efforts. Additionally, DX can be very expensive. Beyond the cost of the technology systems themselves, the investment encompasses the cost of hiring outside consultants or system integrators, and the cost associated with utilizing internal team members for the project. C-level executives can often justify this heavy investment because they know that if they do not evolve, they will not stay competitive. While that may be true, the investment is unfortunately not guaranteed to be effective.
With such a large investment at stake, it is surprising that many businesses do not measure for success. Why is that? First and foremost, they do not define clear business success criteria because doing so takes time, and time is a premium resource that is fiercely protected. The second reason is because it is difficult. Defining business success criteria is not always a straightforward process. Lastly, businesses don’t know what to measure. As a result, many businesses fall into the camp of not collecting enough metrics, leading to the “flying blind” scenario Graffius mentions, unsure of the efficacy of their efforts.
Free PDF Download
In the rapidly changing digital landscape, more and more companies are desperately trying to keep up with the competition. Download “The 10 Biggest Mistakes Businesses Make in Digital Transformation” for free today to learn how to use DX to radically transform your business and gain an edge over your competitors.
On the other hand, simply collecting more metrics is not the answer. Overwhelming oneself with an excessive number of metrics can be counterproductive, consuming valuable time and obstructing the identification of key performance indicators (KPIs) that hold relevant significance. The answer lies in defining the right business success criteria to enable businesses to accurately measure and track their ROI and overall success.
4 Steps to Choosing the Right Business Success Criteria
Choosing the right business success criteria can be a challenging and time-consuming process. The four steps outlined below help guide businesses in defining SMART metrics – specific, measurable, achievable, relevant, and time-bound. SMART metrics provide businesses a tangible measure of progress and clarity on how their efforts are translating into results. This data-driven approach facilitates informed decision-making, enabling organizations to identify areas of improvement, rectify inefficiencies and streamline processes.
Let’s follow a fictional chain manufacturing company, Link’d, as they work through these five steps.
1. Define the Goal
Link’d example goal: Increase overall profitability.
2. Outline Criticality, Impact, Difficulty, and Benefit
Each goal has a different level of criticality, impact, difficulty, and potential benefit. As Link’d keeps in mind their goal of increasing overall profitability, they outline the following selections:
Criticality: Tactically Important, Strategically Important, or Mission Critical
Link’d selection: Mission Critical
Impact: High Impact, Medium Impact, Low Impact
Link’d selection: High Impact.
Difficulty: The difficulty of building better KPIs will be low, while addressing the rising cost of materials is a more complex supply chain issue that will increase the difficulty.
Benefit: The potential benefit will be significant. In addition to increased profitability, Link’d will experience increased customer satisfaction and improved product quality.
Transformation is not easy, but it doesn’t have to be impossible. Take control of your project’s success today and schedule a free 30-minute consultation to find out how Victoria Fide can equip you for transformational success.
3. Determine What’s Necessary to Measure
With the goal in mind and clearly defined, it is necessary to determine specific and tangible areas to measure that will propel the project toward the goal. To improve overall profitability, Link’d decides to focus on a smaller scale and measure the profitability of each of their active or recently completed projects.
4. Set Targets
Effective targets need to answer two questions: How do we measure? And what is the value output of the measure? Link’d’s target–- based on the information from the previous assessments and discussions–- is to reach a 10% increase in average project profit by the end of the year.
Once Link’d has worked through these 4 steps for each success metric, they will have relevant SMART metrics and unified objectives, and they will understand why they’re undertaking this initiative. These specific business success criteria allow them to assess their progress and determine whether they are on track to reach their profitability goals.
How Metrics Impact Business Decisions
Metrics are instrumental in influencing business decisions and strategies. Most importantly, metrics serve as a “north star” in design sessions, in the sense that the metrics are not the destination, but rather are benchmarks to guide the team toward the same goals. When going through the design session, many of the business requirements brought forth may be beneficial, but if they are not aligned with the business success criteria, the business may not believe that they will achieve the desired return on investment (ROI). In such situations, it’s crucial to revisit the metrics or realign on design priorities. This ensures that all efforts are pointed in the same direction – toward the organizational goal.
Furthermore, metrics ensure that a project is meeting its business requirements. By periodically measuring progress against specific, preset metrics, organizations can determine whether their projects align with their business objectives. If any discrepancies are observed, necessary adjustments can be made promptly, preventing wastage of resources and time. Therefore, metrics are more than arbitrary numbers; instead, they serve as a continuous compass, guaranteeing that every step taken is in sync with the larger business goals.
Monitoring Metrics for Business Success
During the project implementation phase, these business success criteria must be monitored at every milestone. This ongoing monitoring enables project leaders to observe trends, identify potential roadblocks, and make necessary adjustments. The business success criteria not only guide solution refinement but also influence change management strategies. Regular tracking and analysis of these metrics provide actionable insights, enabling effective digital transformation and ensuring that the project aligns with business objectives.
The true value of defining business success criteria lies in their ability to measure the effectiveness of the digital transformation effort well beyond project completion. In Victoria Fide’s Sustain phase, these business success criteria are used to measure the project’s long-term success. The insights gained from these metrics are used to address user adoption concerns, making necessary alterations to increase user acceptance and engagement. Moreover, they assist in planning for future phases or projects, helping to optimize impact and foster continuous improvement. By focusing on these metrics in the sustain phase, organizations can ensure that their projects remain relevant and beneficial in the long term, contributing to ongoing business success.
Steering With Precision
In conclusion, business success criteria play a crucial role in guiding business decisions, aligning teams toward common goals, and ensuring project success. By leveraging Graffius’ invaluable wisdom, organizations can navigate the complex business landscape with greater clarity and precision. Ignoring this wisdom, on the other hand, puts them at risk of either flying blind, lacking crucial insights, or flying with an obstructed view, hindering their ability to fully capitalize on opportunities and address challenges effectively. Therefore, investing the time to clearly define the necessary metrics is not only advisable but imperative for organizations seeking sustainable growth and long-term success.
Victoria Fide actively guides our clients in implementing Graffius’ recommendations for selecting the appropriate metrics to achieve business success. We work alongside our clients, offering our business expertise and technical resources to help them identify their goals, gather relevant metrics, and achieve their desired business impact. This partnership is not just about providing services, but about creating a collaborative environment where our client’s success is a shared objective.
Are you ready to take your organization’s performance to the next level? Contact us for a free 30-minute consultation. We’re here to provide you with expert recommendations tailored specifically to your needs and aimed at steering your organization in the best direction for success. Partner with us today and watch your business thrive!
Subscribe to our weekly LinkedIn Digital Transformation Success newsletter and get notified of each new edition.