Little Data - Balanced Scorecards in Retail
It would appear that there is now forceful momentum behind the term ‘Big Data’, infact last week was officially ‘Big Data’ week where the bandwagon rolled into over 30 countries and gathered great attention.
It may be a tad cynical but something doesn’t quite sit easy with me when using the term. It smacks me like a sales ploy. Now please don’t get me wrong, I’m a great advocate of the advancements in the sector around data size and sparsity; indeed if we look back only 3-4 years as developers in the multi-dimensional modelling world, we could only dream of such unadulterated data volumes. However, are we missing the bigger more relevant picture of this movement: Are we starting to become overwhelmed with the volume and struggling to separate the meaningful vs. the noise? Is more data always better than less data, or can it lead to even more confusion?
The way I see it, there is a perfect middle ground. A sort of ‘Little Data on a Big Scale’. We now have the tools at our disposal to track millions, even billions of data points and to scour the globe for trends, financial data, customer behaviour and performance metrics. But this data is only as good as the decisions that are made off the back of it.
The Balanced Scorecard is a great example of this concept. At Bedford we have worked with a number of companies in the retail sector who have adopted the Scorecard methodology and who have attributed notable achievements in recent times to their focused approach to business critical metrics, between Strategy, Finance, Customer, Operations & People perspective. Research has shown that 44% of UK companies are now using the Balanced Scorecard approach, and my guess is the majority are doing so inefficiently and would openly admit that. This is where the term ‘Big Data’ is often misplaced; we’re not talking about adding every metric under the sun to a performance tracking pack. Rather we should be utilising ‘Big Data’ to work for us by defining the meaningful business specific metrics, which will allow us to gather the right data as evidence to support the next step and draw data-based conclusions.
The fact is customers will consistently evolve at a faster rate than retailers, and it is critical that they remain pro-active in response to performance opportunities. Do not mistake ‘Big Data’ for data gluttony. It will allow you the medium to collect and disperse to the wider business community on a rolling basis, and help to dynamically engage the local teams on these key metrics which have been carefully selected to support the company’s ambition.
The Balanced Scorecard has often been referred to as the ‘Steering Wheel’ strategy, helping you obtain big goals by breaking them down into smaller, more achievable goals. As understanding grows about how the drivers of the business impacts results, teams can reduce huge volumes of metrics and reports down to a bare minimum. It’s simple:
Well trained staff and management in store;
Right staff in the right place at the right time;
Hold only the stock to meet customer demands;
Give excellent customer service. Happy customers buy more products;
Make more money for the shareholders……………
I always seem to come back to the Warplan – Strategy & Tactics. Strategy: what do we want to accomplish from the war and what battles do we choose to fight. Tactics: determining how each individual battle is to be fought. Once accurately executed, the Balanced Scorecard will allow you to communicate those tactics to the wider business community and will identify what is working within a store or department, what is average and what needs improvement.
Embrace the ‘Little Data on a Big Scale’ attitude to help you overcome each mini battle and introduce the scorecard approach as the focus of your weekly huddles. It will help drive pace, focus and alignment to the company strategy. And please, keep it under 15 metrics!
“The Balanced scorecard is like the dials in an airplane cockpit; it gives managers complex information at a glance” Robert. S. Kaplan and David. P. Norton, Harvard researchers & initiators of the Balanced Scorecard in 1992.