Leadership Decision-Making and KPI Metrics
Decision-making is defined as the process of making decisions; it makes sense, right? Everyone has to make decisions, but there are those who are paid to make decisions for others and organizations. These high-level decisions are often at the executive level and come with a heavy responsibility, and that weight causes anxiety, stress, and mistakes. Decision-making fatigue results in the inability to gather data in such a way that it brings value. Decision-making is tossed in a sea of data, but there’s an inability to use the data to change outcomes or even predict. A study has shown that 40% of executives are worn out in untangling the coils of business decision-making.
In a world influenced by AI, analytics, and people who specialize in statistics and report development, we use these resources to drive better outcomes; it is no wonder that decision-makers are inundated with why, how, where, whom, which & when that is forced from the data. All this data, the origin, and the various forms of sourcing & reporting add another layering of decision-making that must be done. The extra layer of tasking has changed the dynamics of many leaders and or organizations, who often are unprepared to deliver accurate and effective outcomes & projections. The extra layer of tasking relevant to decision-making really cuts across positions and can create unclear roles, overreliance on consensus, inability to delegate, delayed deadlines, missed targets, useless reports, and death by committees & meetings.
According to a study, 61% of executives say that at least 50% of the time that is spent in decision-making is ineffective. Relying on bottom-line thinking, internalize what you conceive this to be, but if this eludes you, and you’re intrigued, Perspective Partners can help with this! Alright, the basics, to cut to the core of anything, you have to chip away at it in order to reveal and expose that which is being sought. Working within a multilayered approach in decision-making need not take prolonged planning with various committees along the line of discovery, that then cause delayed action.
For sustained and rapid decision-making, here’s what should be considered:
- Fixate on pivotal decisions that will help create value & serve its purpose.
- Clarify the roles of decision-makers & the other voices. “Vote vs Voice”
- Push DM authority to the frontline & allow for mistakes
- Center of attention is the VOC, and VOC is your leverage
- Rid your department, organization of unnecessary, unproductive & stupid meetings
- Remove lengthy fancy reports that simply reiterate data that has already been exposed & build a report cadence that aligns with objectives & goals
- Utilize standard industry metrics that are in alignment with what you are measuring & managing
- Utilize KPIs and KRAs, depending on what you identify as needing to be managed. As a rule, that which can be measured in a quantitative or qualitative way needs to be managed.
With so much data available, you may be tempted to measure everything, but herein lies the problem of DM Fatigue, the burnout. The solution is to measure what matters. Each industry has its own set of KPIs, so understand the benchmarks – the strategic objective that will propel you to the desired goals. KPIs are relational, and thus it’s a relationship. KPIs magnify what normally goes undetected, uncollected, unmeasured, and unaligned. The desire is to close the revenue gap. KPIs reveal strengths, weaknesses, opportunities, and threats; measurement of how well revenue and operations are performing.
In a survey that was done, 79% of those in the study designed & implemented KPIs on an annual basis, with only 22% following through on a quarterly basis. 54% said they would continue the use of the same KPI cadence annually, while 39% said they would track more data, and 7% said they would decrease the data that is monitored. In the study, 1 in ten underperforming companies said they would track fewer KPIs, but not one of the outperforming companies said the same. For those of us in the healthcare arena using KPIs, like the air we breathe, we know that this is a staple that keeps our revenue decisions untangled because we are better equipped to manage performance & outcomes.
Our ability as executives and leaders to make sound decisions and the efficacy of those decisions rest on how we view and interpret data. The coils of decision-making untangle when we understand what matters; that which is measured, data interpretation, and then how we use that data. The great help that is freely given is wired up in what the industry has already provided by way of benchmarks & metrics, so choose the right set of KPIs, develop a relationship with that data, and actively manage.
The greatest value of forecasting with KPIs is not predicting the future; it’s discovering the leverage to create it. The purpose of measuring performance is to guide our decisions to get better results. Forecasting gives us an estimate of how our past or current decisions are most likely to affect those results.
Trust us to be your strategic partner in achieving success and driving sustainable growth. Contact us today to schedule a consultation and take your business to new heights!
