I want to explain an approach that will help you prioritise your most important objectives and initiatives in order to create deliverable actions plans and meaningful performance measurement.
If you do need help with developing your business objectives or you simply want to benchmark existing ones, take a look at our recent posts on SWOT analysis and building a situation analysis. They provide direction on shaping your thinking, key objectives and your data strategy.
When thinking about KPI reporting, it's easy to get bogged down in a plethora of marketing metrics and performance indicators.
The simple techniques outlined here will help you sort the wheat from the chaff and focus on what really needs to be measured and reported.
Step one: categorise
Let's imagine an organisation whose objectives are to increase revenue and market share by developing new products and services, reduce costs and improve customer relationships by strengthening supply chain collaboration and improved stock forecasting.
By analysing these strategic themes using the recommended SWOT and situation analysi tools, we would obtain the following list of possible initiatives:
- Improve reports and dashboards to support new financial planning activities & control tasks.
- Introduction of a new product line.
- Development of an online ordering interface for VIP customers.
- Improve stock forecasting.
- Open access to company information to help supply chain partners better plan their delivery schedules.
By compiling a business priority canvas you will see that your key initiatives fall into one of the three core organisational processes: management processes, revenue generating processes or efficiency processes.
- Management processes: help you with planning, organising and making decisions about human, financial and material resources - for example, marketing planning process, budgeting, marketing effectiveness and performance management systems.
- Revenue generating processes: directly impact your profits and allow for growth - so activites like customer segmentation development, channel management and new product development or innovation.
- Efficiency processes: reduce costs and improve the overall consumption of resources and operations. From a marketing perspective this would be activities likes address validation to improve data quality and reduce mailing costs, automating key parts of a contact strategy or outsourcing campaign production.
Step two: prioritise
After categorisation, utilise simple techniques to assess each opportunity and any associated risks in order to establish priorities:
- Use an opportunity map (see example below) as a starting point for discussion to define risks and business impact of each activity
- Use insight gathered from real data analysis and structured decision-making to inform the prioritisation wherever possible.
- Score each based on perceived urgency and opportunity (1 = Must have, 2 = Could have, 3 = Not critical).
Business impact is meant here as a measure of the positive effect made on sales or performance, while risk is a measure of probable exposure to failure or loss.
Once you have completed your assessment you can assign priorities to your Business Priority Canvas
Ideally you will end up with only one top priority, but in case you have multiple priority 1 items, you can use the high level categorisation in the canvas to help you choose a winner based on alignment to overarching corporate goals.
In this example you would consider if revenue generating activities or more or less important than improving internal management processes and then re-apply the score.
A final thought
It's been our experience that using the business priority canvas alongside other analytical techniques, has enabled our clients to focus their minds and budgets on what's most important. This is key to achieving success in complex data-driven initiatives, such us loyalty, CRM and business intelligence solutions.