Information is the oil of the 21st century, and analytics is the combustion engine.
—Peter Sondergaard, senior vice president, Gartner Research
AMAZON.COM HAS WHAT JEFF BEZOS CALLS A “CULTURE OF METRICS.” Amazon tracks its performance against about five hundred measurable goals, nearly 80 percent of them related to customer objectives. It gathers so much data about customers that it eschews classic customer segments—“millennial outdoorsman,” “preteen fashionista”—in favor of segments of one: you.
When a visitor comes to Amazon.com, she’s greeted with a home page covered in personal recommendations tailored to her and based on her browsing history, purchase history, and Amazon’s best guesses of what will interest her based on comparison to the thousands of other shopper profiles. In fact, Amazon is getting so good at knowing its customers, at predicting what they want, that in 2014 it filed a patent for “anticipatory shipping.” Amazon believes that it will someday be able to predict what its customers want so accurately that it will begin the shipping process before the orders are even placed.
If you haven’t heard, this deep data strategy is paying off. Amazon has one of the best customer satisfaction ratings in the United States, and it translates that wealth of customer data into new customer-satisfying innovations like the Kindle, Amazon streaming, and Amazon Web Services.
Maintaining specific, measurable goals and tracking key metrics, leaders at Amazon can make decisions quickly and confidently, with the best information possible. The rapid iteration required of digital innovation—particularly for network businesses—requires this type of support.
The goal of Track, an ongoing process, is to determine which metrics and which reporting frequency you need to best support the development of your network business. You will create metrics to track the health of the three key components: the network, the platform, and the internal team. Additionally, you will determine the cadence and timeliness required for this data. Finally, you will begin to think about experimentation.
Let’s start by reviewing the network orchestration business model diagram. The key elements of network orchestration are the network, the company, and the platform where they interact. You should carefully measure and track each of these components. This information lets you judge the health and progress of your endeavor and lets you design experiments that will help you adapt and grow.
For the network and platform metrics, the network leader and her team should create a proposal, based on what team members think will be most important to gauging success in the network initiative, and share it with the organization’s executive team members, who will have final approval. Because of their closeness to the project, network team members will also create the structure, whether organizational or technical, to gather the data to report on these metrics. For example, to track the number of network participants and the number of interactions, you will need a reporting dashboard within the platform itself.
For the internal team metrics, the supervising executive team will need to determine which metrics are most important for judging the success of the network team, and it usually makes sense for the network leader to gather the data and regularly report upward.
With the responsibilities laid out, let’s discuss what most network organizations need to report on.
We start with the network, because your new business model revolves around a network focus. There are numerous items that can be measured, but a few themes are mandatory, such as size, growth, activity, and sentiment. How exactly you measure each of these dimensions depends on the specifics of your network business, but here we offer a few suggestions:
For each dimension, write down the specific metrics that you believe will help you assess the health of your network. There may also be key metrics unique to your endeavor, so consider whether additional metrics will be important, and add them to your list.
Frequency and timeliness are also important. Recall that one of the key differentiators of big data is the speed of gathering and the relevance of the data. For each metric on your list, note the cadence at which the metric should be tracked—hourly, daily, weekly, monthly, or quarterly—and the lag time that would be acceptable. For example, do you need real-time data, or is it acceptable to review a week’s data one week later? Be realistic about these answers. Most leadership teams can track and respond to only the most essential numbers on an everyday, real-time basis.
Finally, create a goal for each metric that you hope to achieve within the first six months of your network’s operation.
The platform is what enables the network to do its thing—serve itself and interact with your company—and it needs to be in top shape. Several items are always important for understanding platform health. How exactly you measure each of these dimensions depends on the specifics of your network business.
For each dimension, note the specific metrics that will help your organization judge the health of your platform, and add any other metrics that we have missed that are specific to your business.
Just as you did for network metrics, determine the cadence at which the metric should be tracked—hourly, daily, weekly, monthly, or quarterly—and the acceptable time lag. Then create a goal for each metric that you hope to achieve within the first six months of operation.
In truth, if your network and platform metrics look good, you probably don’t need to worry too much about your team. They are doing their jobs. However, we have found that it’s important to specifically think about the health of your internal team, particularly because often it is working in a very different culture and using a different mental model from the rest of the organization.
Here are a few items that are useful, but again you need to tailor the specific metrics to your organization, business, and team.
Some of these goals and metrics are harder to track than others, because they don’t happen online or on your platform. Think carefully about how you will track the health of your internal team as they work to grow your network business. You may need to attend team meetings every week or have regular one-on-ones with team members. Determine the cadence at which you will assess the health of your team, and create goals for each of the metrics.
Once you’re able to measure and track the status of your network, platform, and internal team, you can take specific steps to improve the key measures. After all, the purpose of measurement isn’t only knowing but also planning strategic actions based on that knowledge.
Ongoing experimentation must be part of the internal team’s mandate in order to home in on the best ways to interact with and serve the network. And the team must have the autonomy to design, implement, and act on these experiments. Amazon and Google, for example, are known for their ongoing experimentation with new formats, incentives, algorithms, pricing, and more as ways to maximize value creation for themselves and the network. Your team will do the same thing but on a smaller scale, at least to start. Having a dashboard with all the key metrics in place will set the stage for clear and productive experimentation.
Brainstorm with your team on experiments that will help you determine how best to grow and evolve your network business. The experimental possibilities are endless, but be sure to consider factors such as marketing communications (both frequency and content), pricing models, referral bonuses, and the designs of your website and apps.
Tracking was the hardest part for the Enterprise team members; they simply didn’t have the technology in place to gather and review this type of data, particularly because their digital communities were still under development. Even their tracking of physical assets was fairly low-tech. Although the human resources and enterprise resource planning systems were digitized, they weren’t in the cloud and were only partially integrated with the other systems that Pradip Sitaram had built.
In fact, as of this writing, Enterprise is still developing its nonfinancial mission-centric metrics and reporting, which will be used to guide capital allocation across the organization. Sitaram’s team made thoughtful recommendations about what should be tracked for each of the three networks (internal, suppliers/partners, and residents), and the technology team was working on a comprehensive road map that he had submitted to Terri Ludwig for her review.
The internal and B2B team members began quickly working on road maps and integration plans so that they could tie in to existing systems and provide real-time dashboards that the management team and the board could use to steer the organization. At the same time, the resident (B2C) team began experimenting, on a small scale, by developing use cases and storyboards and reaching out to interview residents in some of the key communities.
Charlie Werhane knew that it was possible to gather network participants from the forty million families Enterprise could serve, but potential members needed a clear value proposition. Getting there required not only the firm’s new vision—“one enterprise, one technology, and one operating system” (referring to culture)—but also good data to measure its progress and performance on this new journey.
Sitaram is eager to bring his technology to the market and help implement the vision that Ludwig has put forward. The whole team is eager to expand Enterprise’s reach and serve ten times, or maybe even one hundred times, as many low- and moderate-income families as it does now. The goal, as always, is to help Enterprise achieve Jim Rouse’s original vision when he said, “What can be, ought to be . . . with the will to make it so.”
We will all have to wait and see.