All You Will Ever Need to Know About Analysis

Improving performance isn’t very difficult, it is just about fixing things that don’t work too well.  The problem is trying to work out which bit to fix, what is important, where will you get the most bang for your buck.   It is easy to fall into a world of analysis paralysis, pain and despair.

You can stop that by asking 3 simple questions:

Question 1. What is important to your customers?

What are the key performance indicators?  It is a really hackneyed and overused term, but it means exactly what it says, it indicates performance and it is key, nothing cleverer than that.

Imagine you run a pizza delivery business, people phone you, when they are hungry, they want to eat something and they want to eat it now.

There are 2 or 3 key performance indicators:

  • Was the pizza tasty?
  • Did it arrive quickly?
  • Did it cost a lot?

There  are lots of other things you could measure: the time it takes to make the pizza, the average miles per gallon of the pizza boys scooter, the quality of tomatoes it takes to make each batch of sauce.

They may be very important, but they are the next level of detail down.  Looking at all of them all of the time is just a distraction.  Focus on the key measures.

Question 2. How good are you?

Let’s take delivery time, how long did it take?

  • It is interesting to know if you hit your target yesterday
  • It is interesting to know if male or female riders are quicker
  • It is interesting to know how many wrong turnings the riders took

But what you really need to know is if you are getting better or worse. The only way to do that is to draw up a simple line chart over time. The numbers won’t lie.

Trend Analysis

Question 3. What can you do about it?

The final question is why does it take so long, this is really important because once you know the answer to that you can do something about it.

There is a rule called the 80:20 rule. It says that some things are much more important than others.

An example; even though you have more than one pair of trousers, you have a favourite pair, you wear them most of the time.  Not everything is equal.

The same is true of the time it takes to deliver a pizza, one thing will be far more important than the others.  The way to work out which it is is to draw a simple graph which shows where the time is spent, and order it biggest to smallest.

Pareto Analysis

Now it is clear that it is pointless working on the time it takes to answer the phone or the time it takes to make the pizza.  The thing to worry about is the time it takes to get the pizza to the customer, how could you fix that?

  • Buy faster scooters?
  • Use satellite navigation?
  • Limit the distance you are prepared to deliver in?
  • Ensure all your scooter drivers have “the knowledge”?
  • Pin a map to the top of every pizza box to make it easy for the rider?

You know your business, so do your employees, you will know the best solution.  It is easy to improve your performance if you carry out a little clear simple operations analysis.

Have you?

Image by jot.punkt

Comments

  1. Nice and simply laid out

    We should aim to be clear in our use of Analytics and I think your example does that very nicely

    I don’t see people using the Pareto principle in business nearly enough

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