Do numbers really matter when managing store performance?
Why does the existence of performance numbers impact the very performance they measure. It is often stated ‘If you want to improve something measure it.’ The statement is rarely disputed but not always supported. There are just as many reasons not to analyze your data as there are to do so. a common one is that it is a sacrifice of productivity and time. When people are very busy, there is a tendency to minimalize the measurement and assessment effort. However, when measurements and analysis are limited, you may not be given the underlying reasons for your performance. You can end up spending the more time than you saved to hunting for answers. So both sides argue for saving time and getting work done. These conflicting reasons and results present the question of what the true balance is between effective analysis and efficiency. There seems to be two camps – believers .and non-believers.
1. What can anyone really do about sales anyway?
2. Driving sales is done with promotions and that just costs you money
3. The same amount of stuff is bought anyway, all that you do is change when it is bought
4. All you need is a basic daily summary to make sure things are okay the rest is just a waste of time
5. Measuring takes time and money and keeps key staff from doing the important operational work.
Even the points that are used to explain why numbers do not matter, provide some justification for how it helps. The first point indicates that the person may not be a retailer. Sometimes operations people are placed in roles that require marketing and retail skills. The second point actually shows that sales can be impacted but talks about profit margins more than the lack of ability to affect sales. Point three may be the most important. If there is a limited market, then not driving sales may allow competition to get it. And finally, if there is a need for some number, then the argument may be one about the choice of measurements rather than the efficacy. Indeed, the second part of the measurement tenant is to be careful what you measure. Of course any measurement system requires time and money. Further, most companies report that their staff is working hard and feeling stress. It is important not to overload workers or distract them for the main job.
‘Without data you’re just another person with an opinion. ‘
W. Edwards Deming
1. Measurement allows comparison so we know if things are better or worse
2. Knowing what is working and not working identifies problems that need to be fixed
3. Tracking allows audits so that validations may be made to ensure waste and shrinkage do not hurt performance
4. Having the right information with all staff allows everyone to work with the same information.
5. Measurement shows staff what management values. Having a scorecard allows clarity with business goals and performance.
6. Results justify rewards and explain restrictions.
As with most things, there are arguments for both sides. When a proper use of measurements is put in place it addresses both the plus and minus points. Even if you agree to measure, it is important to make the measurements as simple and cost effective as possible. Using the data must be straight-forward fit into the work flow and time constraints for work. When done well the numbers should provide insight into key performance for the ultimate goals and the leading indicators that allow managers to gauge performance and drive the work that they can control that will lead to the desired results.