What types of measurement should be most important to a company that wants to succeed?
MH: Financial measures are fine for what they were intended for: tax regulatory purposes. But they re pretty damn useless for actually running a company. They tell you what s happened, but not why. And they tell it to you too late to do anything about it. Other than that, they re pretty good. You have to translate certain strategic goals into current controllable phenomena. It s not enough to know that you re profitable. You have to understand the drivers of profitability. For instance, you understand that in order to increase sales you have to retain your existing customers. In order to retain your existing customers, you have to deliver on time what they ve ordered. Then an important measurement becomes on-time delivery. You can measure it as it happens and intervene quickly if something is going wrong. There are no universal measures. What there are are company-specific measures that are driven by an understanding of business process and of what you control that really shapes the ou
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