When teams see problems everywhere, they find it hard to focus. If you’re managing with high level results alone, your data is not helping establish priorities, i.e. its not creating team focus. This leads to whack-a-mole - problems are never permanently resolved because folks don’t stay focused. They have to move to the next issue quickly because - they’re all hot!
To help create focus, every major area of business performance can and should be broken into Categories. Categories; like where an expense or issue occurs, why it occurs, by product family, by department, etc. If it were simple, you probably wouldn’t have a problem. Data in actionable categories simplifies problem solving.
Most often, categories in a given area of performance are obvious, but this isn’t always the case. When the categories aren’t obvious, you can use the 5 whys or 5 wheres to help figure them out, (I made up the 5 wheres, but you get the point.)
Managing with category data indicates an organization has a solid process understanding. Without category data, you can’t be sure the process understanding is deep or comprehensive across the organization. In fact, it's probably safe to say - the understanding varies, some understand it, others, not so much. To keep the entire team pulling the same direction, everyone needs to understand what categories have the largest opportunity for improvement.
It's management's responsibility to ensure an organization manages with category data. Management must make the acquisition or creation of category data a priority.
Categories alone don’t create focus, but they are a start. More on creating focus in a future post.