Steering Practice Performance

"Numbers have a way of taking a man by the hand and leading him down the path of reason." - Pythagoras

Almost everyone in management has heard some derivative of the phrase, "What doesn't get measured doesn't get managed." Have you ever considered what numbers are critical to the performance of your Practice. Have you ever considered what doesn't get managed?

There are two kinds of measurements that are pertinent to Practices - leading and lagging indicators. Lagging indicators are those that get reported after operations, while leading indicators are those that get reported during operations.

Financial reports are a good example of lagging indicators - typically they arrive 4-6 weeks after the close of the month. They report what happened in the past tense. While they may provide important financial information, they are all past tense. They don't help manage in the present tense. They are about something that happened rather than about something that is happening. It's like driving with your vision focused on the rear view mirror... you wish you had not hit the skunk and run over that box of nails but there is nothing you can do about it. Its done.

On the other hand, leading indicators are like driving with your eye on the road ahead. They provide you with information about what is approaching and provides you with the lead time necessary to take corrective action. Such information allows you to steer the vehicle to an intended destination while avoiding those things that would prevent you from achieving your intent. This is the kind of real time information that is missing in most Practices. This is the information that prevents most Practices from achieving their inherent potential and reward.

There are 13 key pieces of performance data that every Practice should capture daily. That data generates 17 key performance indicators that allow a Practice to reliably navigate to their desired level of performance rather than operating in a reactive mode where every reaction is too little, too late - i.e. the damage has already been done or the opportunity has already passed. These kinds of leading performance indicators represent the difference between superior Practice performance and typical performance. It is a difference that is measured on the bottom line, in a good nights sleep, and an early retirement.

What are you measuring? Got leading indicators?

Bob

Copyright 2007
Performance Builders