Every department has different figures. How do we know which ones to trust?
Different figures across departments almost never mean that someone has calculated them incorrectly. They mean that each department measures something slightly different and no one has ever defined precisely what the metric means. Define the terms before you start fixing the data. The discrepancies will usually resolve themselves.
A typical manufacturing example
Management asks for the scrap rate for the previous month. It receives three figures.
Production calculates scrapped items as a proportion of all units produced and only includes what was thrown away. Quality calculates it against the number of units inspected and includes reworked items. Finance calculates the cost of non-conforming production as a proportion of revenue.
All three figures are correct. They answer three different questions. The problem is not the data; it is that no one has agreed which question is actually being asked.
How to align the figures
Step 1: Select five to ten metrics that genuinely inform decisions. Not fifty. Choose the ones that management asks about every week.
Step 2: Write one sentence defining precisely what each metric measures. Include what is and is not counted, what it is measured against and over which period.
Step 3: Decide who is responsible for the figure. One person, not a department. If two figures diverge, someone must be able to say which one applies.
Step 4: Define a single source. Choose one system as the source for each metric. Other systems may display it, but they must not calculate it in their own way.
Why a dashboard cannot solve this
I regularly hear, 'we need a dashboard', and in this situation I do not recommend it as the first step. A dashboard built on undefined metrics does only one thing: it spreads the disagreement more quickly and with better-looking charts. People will stop trusting it within a month, leaving you with one more unreliable source.
Defining the terms takes a few hours and requires no technology. A dashboard without those definitions costs hundreds of thousands of Czech crowns and solves nothing.
How you know it is beginning to work
People stop saying, 'but our figures are different', in meetings. When someone does say it, there is one person who can explain within a minute which figure applies and why. That is the entire goal.
Your next step
Defining metrics is one of the first things I address with companies during a Digital Business Review, because there is no point building anything else without it.
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