Thursday, December 25, 2008

Management Matrix And It's Measurement.

Management Matrix have an operating model (not just a collection of people), which allows you to scale better, ie economies of scales in production, sales, and in optimization.

Management Matrix understand the key drivers of output in your operating model in production ,sales, materials management.

Management Matrix are consistently managing the unit to your operating model.

Management Matrix have a set of early warning signs (your key drivers) that you can focus more attention on when they get below certain thresholds (i.e., it helps you to know where to spend your time).

Management Matrix have a set of measures that you can benchmark against other companies to understand where you have opportunities to move to best practices, and

Management Matrix know when you need to add staff or other resources well before you get caught short.

It is an approach in measuring the effectiveness of the business operation.

Metric driven management can and should be applied in every functional unit in an expansion stage company, from product development activities (e.g., project management, bug fix reports, usability testing) to marketing (lead generation ROI, website path analysis, shopping cart abandonment, number of daily quality leads) to sales (e.g., movement through the sales funnel, salesperson activity analysis) to customer service (response time, close rates, close times, etc.) to overall customer satisfaction measured both qualitatively (surveys, interviews, etc.) and quantitatively (usage reports, retention rates, etc.).

The key to getting the right metrics program in place is to eventually understand the minimum number of measure that give you an accurate understanding of the state of your company.

In different situations and in the transformation time Matrix Management helps an organization.

Many (most of the organizations) very early stage companies can get by without metrics-based management, as there are very few people in the organization, the processes you have are quite simple, and you can manage staff a lot easier. But as soon as you start getting any measurable number of users/customers, metrics-based management starts becoming useful, and as you grow more metrics become difficult to live without.

There is no sense building systematic operating models and a set of metrics if you are not going to manage to them. I have met many intuitive managers who don’t get (or don’t want to get) this approach. If you don’t believe in the approach, shoot me a note or comment to this post. If you don’t completely get the approach, hire someone to work for you who does (I have done this multiple times at my portfolio companies).IT comes in to operation it enhances the efficiency of an organization.

Once you lock into a set of metrics (it will take some time to determine the best most simple metrics), you should try to use the same metrics over time. I am amazed when I go into certain board meetings and see a different set of metrics each quarter…sometimes managers feel the need to present the metrics that show off the accomplishments of the company…I would rather see the metrics that show the improvement opportunities for the company…this is where the real upside is!

Many consulting companies are there who are operating in the matrix plans and operate accordingly.

Here is an example of Wipro Infotech



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