The problem with that though is just relying on your eyes and ears as data is that people act different knowing you’re the boss, and so they are going to put on their best front when you’re watching, and you may not see what’s really going on in your organization once you leave, so you probably do need some numbers too. A big barrier in a small company is finding the money to do this, to go out and buy some software and finding the time to collect these numbers and have meetings and so forth.
Next question, how do you convince detail oriented managers to agree with a index metrics?
That’s an excellent question, and I often run into those types of managers, and the answer is you don’t convince them, but usually you can get them to agree that nobody can manage 50 or 100 variables, it’s impossible. So, they can agree with that, but they need to have that kind of detail to feel comfortable, to make sure they are not being snowed and so forth.
What I tell them is that you’re going to have all that detail, but it’s going to be stacked into layers for you. So, at the very top of your scorecard you’re going to have 16 measures and underneath each one of those 16 there will be three to four sub measures, and underneath each one of those there’ll be three to four and so forth.
Some dashboarding software has a feature I call an idiot light where if the Tier 1 gauge is green, but you’ve got a little tumor growing somewhere, the idiot light will flash red. What it’ll tell you is that somewhere in your organization you have a little problem that needs to be addressed and it may be seven layers down. It may be that location that you have in Albequerque, and it’s a small office, but they are having some kind of a problem.
So by having that warning light on the dashboard, that prevents the detail oriented managers from having to look at 300 or 400 charts to see what’s going on, and it allows them to drill down to find out exactly where is the problem. So that’s usually how I convince them that you can manage an organization as big and complex by having 15 or 20 high level measures because there is a lot of intelligence underneath each one of those measures.
Next question, how do you combine unlike units of measure into a single number?
You have to convert everything to some unit of 0 to 100 or 0 to 10. You’d have to take something like your weight in pounds and say what would a 10 be, if a 10 is good and you’d have to take your cholesterol which is in milligrams and measure that and say what would be a 10? So if your cholesterol is 200 or less, that might be a 10 and if it’s 400 or more, that might be a 1.
So that’s how you do this is you take each one of the individual numbers and you put it on a scale from 1 to 10 or 0 to 100, and then you can take all these things. Once you’ve programmed that into the software, it can take the raw data; your cholesterol, your resting heart rate, your weight, whatever that raw data is, and it’ll perform these calculations on them without you doing any work and convert it into the index.
So the people that construct the index have to build all this intelligence into it, so that’s basically how it’s done, and that’s why sometimes these projects take a little bit of time because you want to really think through it and get it right and put the right weight on each one of the factors.
So in the measure, I gave you an example, realage.com, 30 per cent of weight is given to genetics and a much higher weight; 40 to 50 per cent is given to lifestyle. You can’t do anything about your genetics even though they are a factor but you can do a lot about lifestyle.