4 minute read
Data, Metrics and Reporting: What Is Important to You?
We all consume data and metrics differently and your unique need for numbers may emphatically differ from my need or someone else’s need. Let’s talk retail because that’s been my life going back to 1972, and I’ve been a consumer of data, metrics and reports since 1979.
As a department manager, my consumption of reporting information was more single-threaded. Ultimately my focus was my specific department. I was concerned with various aspects of sales, gross profit, shrink, contribution, labor, customers and items, to name a few. Although it was important to me that the total store was doing well, my focus remained my department. Simply knowing that my numbers were by a certain percent, better or worse than last week, last period or year-to-date to budget (or goal), simply wasn’t good enough. I needed to understand the core data. I needed the dollar amount for the total, the variance dollars and the percent.
As a store manager, my consumption of reporting information was multithreaded. My focus was much broader than when I was a department manager. I needed all the data I could get. I obviously needed the data and metrics for all my departments and for my total store, but just as important I needed to know data and metrics for other stores in the company. Why, you ask? It was simple. I wanted to be the best, or at least work toward being the best. I felt empowered by knowing how I was performing compared to everyone else through ranking reports. It helped me understand where I was doing well and where I needed to improve. It helped me know what I needed to spend my energy on or what my focus needed to be. Why would I focus on gross profit percentage if that was fine but my sales were declining? Why would I focus on driving items if that was good but my customer count was down? Having access to all the data was empowering.
And let me add, as a store manager, I needed to know all the data whether it was to be prepared for a District Manager dropping in or executive leadership suddenly showing up at my store. I remember a period review that I had with executive leadership one time. We went through my profit and loss (P&L) and although everything looked good, one person focused on a 15 percent decline in sales to budget, in one very small department. I was almost speechless and if you know me, being speechless is not something I’m famous for. While the 15 percent decline, on the outside, seemed material and significant, it wasn’t until I pointed out that the 15 percent decline represented a $500 variance to a department that had relatively small sales. I then began to focus on the facts of my total store numbers, quoting my sales in relationship to other stores, my gross profit in relationship to other stores and my labor in relationship to all other stores, allowing me to show how well my store was doing. This would not be possible if I didn’t have all the data, metrics and reporting available to me. Limiting any of these took away my power and my ability to react to those things that needed my focus and my ability to correct what needed to be corrected.
Executive leadership needs to consume data, metrics and reporting at a different level, and I understand that. They can’t be expected to have the bandwidth to focus on much more than variances and percentages and the information that comes out of true exception reporting. But their need is not necessarily the need of all. I remember another time when an executive came to me and was asking for help to defend a declining sales per labor hour (SPLH) that he needed to defend because of pressure from his higher leadership. He and his higher leadership were so focused on that metric and they believed that it indicated lower performance. I introduced a new measurement that they hadn’t used before. I calculated customer per hour and item per hour versus SPLH. Earned hours was not something that was fully accepted at the time. By looking at how many customers and items had been processed per every labor hour spent, I was able to show a completely different story. My analysis showed that efficiency had actually gone up and they were processing more customers and more items for every hour spent. In fact, the performance increase was worth several basis points and that satisfied his leadership. We had several years of inflation and now deflation was causing a misconception in the data. So even executive leadership, sometimes, needs to look deeper than they are used to looking and consume more than they are used to viewing to really understand what all the numbers are saying.
In my years in labor management, I just needed it all. Sometimes you have to throw stuff against the wall to see what sticks. Do I need it all, all the time? No. But I don’t want to be limited to what your scope or level of consumption is. All data and all metrics are important. They can inform and give direction and tear back the veil that covers the truth. Data, metrics, reporting and yes, exception reporting too, all have a place. Dashboard reporting that gives me actionable metrics for quick information is important and has its place but full reporting with all the data and metrics you need in your position should be your call and not somebody else’s. Logile will work to provide you with what is essential, meaningful and yes, actionable. This is true whether it is KPI’s in a dashboard or full reporting.
I was once asked if I only had one metric to pick from, what would it be? I was left dumbfounded by even having the question asked. Books need multiple sentences, paragraphs and chapters to tell the story. I don’t see data, metrics and reporting any differently.