Trees that deliver outcomes
Driver trees help support growth and demonstrate how each business function can contribute to success.
It’s possible I am showing my age with this article, but I love driver trees!
Also known as KPI trees, every time I go into a business I build myself one of these. It helps to support growth and demonstrate how each business function can contribute to the success of the business.
Here’s a rundown.
What can a driver tree deliver?
Understanding the key drivers in the business results in the following benefits:
A better P&L result
A clear view of the metrics you need to measure
Visibility of where material value is derived
Understanding the sensitivity a lever movement has on P&L result.
Executing strategy and helping you prioritise
When building a driver tree, my advice is simple:
Don’t overcomplicate things – just keep it really simple. What drives value in the business? This is what you want all teams in the business to be focussed on.
Be clear on what this value is – P&L result, number of members, value to members? Value is different for all companies, so defining this upfront is imperative as it will drive the overall levers.
Decide what levers will deliver your desired outcome – confirm can it be measured – if it can’t, it can’t be a lever.
Highlight levers that are easy to pivot on – no matter how well versed you are in business, no one has all the answers. So starting off with levers that are easy to change gives you an opportunity to test what works.
Highlight the levers that are difficult to change – get ahead of the eight ball and work out a strategy that will allow you to have some flex in this space if necessary.
Measurement is power – using the concept of measuring what matters that I spoke about last week will help your business choose levers that are easier to action, give you a clear understanding of what’s working and what’s not and, most importantly, can be embraced and developed by your team.
If you’d like to us to share more detail on just how beneficial drivers trees can be to supporting your current strategy let us know and we will gladly send you a sample driver tree that you can manipulate in your context to help drive success.
Our team at Whiteark consists of a network of experts who work with businesses to map their value drivers and identify areas to drive an improved outcome. Whether you’d like advice on building a driver tree, or for hands-on help, we’re here. Get in touch on whiteark@whiteark.com.au.
