Complexity kills companies because it hides opportunities and masks problems. Many organizations are managed by an incomplete understanding of the metrics that drive the business. This leads to situations where decisions are made based on outdated information, inaccurate numbers, and an incomplete understanding of what is happening. In an effort to mitigate this, many business owners attempt to solve this problem by creating detailed reports. In the end, these reports rarely improve the situation because they are too complicated for the non-technical managers and front line staff to understand. So, what’s the solution?
The first step in simplifying the management of a business is to break the business down into specific functions. After identifying the functions, key performance indicators (KPIs) can be developed for each area. The KPIs are then ranked in terms of the most important and the most relevant. At this point, the top most important and relevant KPIs are turned into visual metaphors so that it is easy to see how the business is performing at a glance.
Visual management tools reduce complexity, expose opportunities, and shed light on problems. Simplifying the way the business is managed results in a more complete understanding of what is happening up and down the management chain. As a result of implementing an easy to understand visual management system, everyone in the organization is able to see how the business is performing and how their individual contributions move the business forward.