Measure your company's effectiveness and efficiency beyond the assembly line

The process was scrutinized, analysed, and optimised for maximum cost savings. This hyper-analysis in search of the bottom line even sacrificed long-term quality, resulting in higher aggregated costs due to recalls and repairs; the most famous examples come from the automobile industry.

Measurability is growing in importance, expanding beyond traditionally monitored areas like production and manufacturing into sales, marketing and other business areas (e.g. Human Resources, website effectiveness, dealer or franchisee evaluation).

In contrast to production, where milliseconds count and error rates of one in a thousand or even less can be quantifiably measured, other areas that deal with notoriously imprecise qualities — the human factor that drives Sales & Marketing, Human Resources, or Training and Development, for example — are ineffectively measured using scientific, research & development driven scales: you know, pick a number between one and ten. You have probably come across evaluations where you didn't know if you should put a '4' or a '5', or even what it meant. Plus, your colleagues always seemed to have a different idea of what '4' means. And finally, in the end, what did the average of '3.8' or '4.1' really mean and what should you do with these results?

More and more, companies are turning to a more pragmatic, intuitive and result-driven method of answering the important business questions: 'green' (running smoothly and no measures needed), 'yellow' (small corrections needed over the medium term) and 'red' (needs to be improved immediately).

For example, one financial institution, together with an external partner, analysed its sales processes with this traffic light tool and found out that too much time was spent on administrative tasks instead of out front, actively involved with the customer. Measures were taken to improve and optimise the sales process and increase bottom-line results.

Another company evaluated its key account customers with the traffic light tool and clustered all its clients into the three categories: green, yellow and red customers. The company was able to structure an action plan based on customer's category. Because it's not enough to know your customers are content, dissatisfied, or gone over to the competition; you need to do something to turn reds and yellows into greens, and keep the greens from slipping down to yellow or red status. Don't forget your green customers, identify problem areas and formulate strategies to turn yellow customers around, and finally, define and carry out individual measures for your most critical red clients.

Other companies use this flexible Traffic Light Tool to analyse their employees' training needs, offering yellow employees medium term training within six to 12 month, while red employees warranted immediate training and green employees were right on target and required no training.

Another multinational automotive company used the tool to measure the status of the success of their M&A integration, depicting countries with the three colours 'green' (integration fully achieved), 'yellow' (still some challenges but within time plan) and 'red' (urgent attention needed due to huge problems).

Many software and stock companies have adopted the green-yellow-red methodology to visually analyse key figures or stock market prices.

Whether it's called 'traffic light tool' or 'six sigma' or something else, let us analyse your business areas and suggest ways to measure and improve them.

With these pragmatic, improvement-driven tools, the time has come to enhance your whole business, not just the assembly line.

Visit www.traffic-light-tool.com for more information.