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The agile dashboard, part II Joe Perfetti, Scott Koerwer and Mike Canning conclude their look at the new metrics needed for agility
A dead man walking: that was Blockbuster in the year 2000. It just didn’t know it. The company had recently completed a successful IPO that raised almost $500 million and it was flush with cash, controlling 31% of the US movie rental market. That September, chief executive John Antioco deigned to meet with a cash-burning, money-losing, DVD-by-mail rental start-up called Netflix. Reed Hastings, Netflix chief executive, made his pitch: that the future would be online, and Blockbuster needed Netflix to take advantage of the inevitable trend. He would sell his fledgling business to Blockbuster for $50 million and they would go after the online market together. Antioco’s response? He laughed. He couldn’t see the future that was sitting in front of him. The stage was set for Blockbuster’s demise – and Netflix’s rise. As this little bit of history reminds us, at a time of accelerated change and disruption, analysing and extrapolating from the past is insufficient as a guide to the future: you can’t drive a car by looking in the rear-view mirror. In the same way, traditional metrics of business health – market share, growth, earnings per share, profit margin, and so on – do not predict your organization’s future health. They still have value, including as a yardstick within an industry, but they do not indicate your ability to see and adapt to disruptive forces. These more forward-looking measures are what we call the agile dashboard.
The agile dashboard
In part one of ‘The Agile Dashboard’ (see Dialogue, Q3 2019), we drew on the concept of agility as developed by sports scientists to explain how athletes perform in unpredictable environments. Sporting agility is a unique
Dialogue Q1 2020
combination of physical abilities, including raw speed; cognitive abilities, especially scanning the field, anticipating the moves of others and making good decisions; and technical abilities, including the athlete’s body positioning and their ability to pivot and change direction. Businesses also have to anticipate, interact with and react to an unpredictable market system. The highest-performing organizations have similar abilities to those of agile athletes. We argue that ‘agility architects’ (see also Dialogue, Q1 2019) need additional forward-looking metrics on their dashboards which measure: Speed – how fast your organization can move Interaction – the rate at which your organization can scan, understand, discern and decide (SUDD) Pivot – the ability to act and execute on a change in direction. Combined, these metrics will give leadership a picture of their organization’s agility and whether it is able to compete successfully and create value in an increasingly volatile world. Part one of this article focused on Speed, looking at specific metrics for Financial Cycle Time, Production Cycle Time, and Decision Cycle Time – time, after all, is the currency of agile, and speed counts. We now turn to metrics for Interaction and Pivot.
Interaction: a continuous loop
Many companies we work with today are trying to become more ‘outside-in’. Technology researcher and entrepreneur Jack Hidary describes the challenge in terms of ‘exposed surfaces’, drawing an analogy with food: those with a higher glycaemic index have more surfaces exposed to stomach acids, so they