As an analytics leader, my job is to ensure that my organization makes the best data-driven decisions possible. One effective mechanism that I employ — and other analytics leaders can too — is the business review program. This program is a rigorous and systematic review of the most important Key Performance Indicators (KPIs) across the company, involving senior leadership in an ongoing and iterative fashion, punctuated by a regularly occurring cross-functional meeting.
When folks talk about creating a metrics-driven culture, they tend to mean using objective, transparent measures to influence business outcomes. Absent this, people end up making poor decisions based on faulty judgement and the loudest person in the room’s opinion. A natural tendency to combat this is “management-by-KPIs” — unleash all the data, to everyone. However, if done haphazardly, this could result in a scattered set of KPIs, inconsistently measured and used, and stakeholders not trusting or believing the data they see; often because it lacks structure and doesn’t follow a coherent story. Instead, Analytics leaders should institute a holistic and thoughtful business review program.
In this multi-part series, I outline how to think about instituting such a program (hereafter referred to as MBR, for Monthly Business Review). I’ll discuss KPI development, meeting facilitation, failure modes and how to create a feedback loop. As you read this series, please shape my recommendations to your business context.
Note that my vision for the KPI program differs from Amazon’s popular WBR1WBR is Amazon’s Weekly Business Review. See here for more information. in that it takes a less adversarial approach. So while accountability and focus on outcomes are key pillars of success (similar to the WBR), equally important is the collaborative, cross-functional nature of the discussion.
Part 1: Establishing the purpose
Why start a business review program?
The business review program is a forum where senior leaders across the organization meet to review and triage the most important KPIs impacting company objectives. Through the process of public deliberation and thoughtful, cross-functional dialogue, folks objectively interrogate core company assumptions and assess the efficacy of key initiatives.
The main success criteria of the program are to:
- Improve company outcomes
- Ensure broad alignment on company strategy
- Hold folks accountable to their goals
- Establish a cross functional forum to share ideas and provide support
As an added benefit, the implication of a successful program is that your organization’s culture will truly become data-driven, as folks across the company look to the MBR to gain visibility on team performance and transparency into decision making.
Improve company outcomes
The KPIs developed for the MBR should be directly tied to company outcomes. As a result, these KPIs will be higher level than what most individual teams can influence by themselves, and are longer term in nature. Common KPIs may include Customer Lifetime Value, User growth or Average Order Value. A focus on outcomes ensures that everyone is working towards the most important goals.
Align on company strategy
An important element of the MBR meeting is interrogating core assumptions, using the KPIs. Often folks will question why improving one KPI is more important or requires more resources than another. Very quickly the conversation ends up being about company strategy, and any misalignments get surfaced and addressed (offline, to keep the MBR focused on KPIs).
Hold folks accountable
The MBR provides a way to review a team’s past performance in a consistent and well-defined manner. Regularly occurring meetings and documented KPIs allow management to hold other leaders accountable for their team’s outputs in a way that everyone understands.
Additionally, the public nature and seniority of MBR attendees is such that the KPIs and datasets reviewed undergo increased scrutiny. The implication is that folks will spend extra time ensuring everything they present ties together in a way that a non-public, ad-hoc KPI review process may not. Folks tend to bring their “A-games” to this meeting. Moreover, it allows us to treat this dataset as a source of truth, signed-off by attendees.
Cross functional participation
Teams from across the organization should be represented in the MBR meeting. This is beneficial primarily because having a diverse set of opinions and ideas often leads to better outcomes. Folks from different functional areas are likely to see opportunities for improvement that other, entrenched business lines may not. This helps to break silos, increase empathy across teams, and offer a forum for better knowledge transfer.
Many teams use KPIs to track progress, but often lack a continuous forum for moderating that progress. As a result, teams tend to develop an ever changing set of KPIs that folks track in silos, measure inconsistently, and follow up on haphazardly. To combat this, you can start an MBR — a process that will help your team improve outcomes, ensure strategic alignment, hold people accountable and create a cross functional forum. In the next post, I’ll go into more detail on developing KPIs for the MBR.
Thoughts? Comments? Please let me know by joining our Slack community!
- 1WBR is Amazon’s Weekly Business Review. See here for more information.