Corporate Vital Statistics

February 23, 2003 by
Filed under: Leadership, Quality 

All of us can rattle off our vital statistics – our height and weight are easily our most commonly tracked measures, used as key identifying factors on our driver’s licenses and almost any medical form we fill out. They are easy and quick to measure and unambiguous in interpretation, important elements of good metrics. But what value do they really provide? After we reach a certain point in our lives our height changes little (until we reach a point later on when it can decrease somewhat), and comparing our weight against averages or recommendations can create something akin to mass hysteria. Change in weight can be an important indicator for insurance companies, but only exposes part of the overall picture.

Being at an age where my father had already visited heart failure territory at least once, I’ve tried to remain active and eat right, and have learned that vital statistics don’t really tell me much at all. If I’m interested in really understanding my fitness level, I need to dig beyond height and weight, and comparison to averages out there don’t help me gauge my performance.

I need to watch my heart rate and lung capacity against measured loads to see improvement and know when I am pressing my safe limits. Measures taken by professionals during physicals and fitness tests provide additional insight. I know that to attempt a marathon after a sedentary life is foolhardy, and living on a fast-food diet with no exercise cannot be justified simply because you haven’t collapsed yet.

Few software companies know themselves any deeper than the ‘vital statistics’ of number of staff and overall financial numbers. These are adequate to identify and characterize an organization, but give no indication how closely it is running to its danger zone. Is the company overextending itself by setting expectations that it clearly cannot meet? Is its relative lack of fitness contributing to dangerously low energy and morale levels in the rank and file? Is it attempting to run back-to-back marathons without regard to conditioning? Even the Pony Express rested their horses on occasion…

Do you know the level of effort your staff are putting in? Statistics show that overall output diminishes rapidly as effort is increased for extended periods. Do you know your organization’s effective capacity for producing new product? The industry is filled with organizations that overextend themselves and repeatedly fail to meet expectations. Are you taking the proper steps to reduce risk of failure? Cutting the wrong corners can appear to save time, but the ramifications are often disastrous when they arise. Are you taking care of your staff adequately? Do you know the answers to these questions, or are you guessing?

Just as with personal fitness, if you are not tracking more than the ‘vital statistics’ to determine your corporate fitness, it’s a safe bet that you are not performing nearly as well as expected. – JB


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    Another excellent article – we were just discussing this very subject in a course I recently taught. I forwarded your article to everyone in the class, so you might expect a few more subscribers soon…

    — Bruce Butler, PEng, Senior Systems Engineer, Modular Mining Systems Canada