Business Insight Zone

That’s a timeless piece of wisdom, as formulated by Peter Drucker.

Simple as it is, we often fail to consciously — and conscientiously — make the logical connection:

What gets measured –> What gets done –> Big Goals

When you think about your Big Goals, whether for your company, your team, or just yourself, go ahead and think through that chain of connection. In fact, take some pains to work your way through the details:

• What has to happen for your Big Goals to come to fruition?
• What are the moving parts of the Big Goals — the major projects and tasks?
• What metrics apply to those projects and tasks?
• How can you collect and manage the data to satisfy those metrics?

Now, turn the process around and look at each thing you’re already measuring. For each one, ask these questions:

• Which Big Goal does this metric help us to achieve?
• Does this metric help us enough that it’s worth the time, effort, and expense to gather and organize the data?
• Is the metric well-organized so that it’s easy to understand and most relevant for helping us reach the Big Goal?
• Is the metric well-communicated so that decision makers and other stakeholders understand the numbers and their implications?
• Would it hurt anything if we stopped using this metric? Or, in other words, should we be measuring whatever-it-is at all?

Pay close attention to that last bullet, because there’s are at least two costs hiding in there if it’s something you shouldn’t be measuring. First, there’s opportunity cost, since whatever time or money you spend on measuring the thing could be spent be better on something else, or simply not be spent at all and fall to the bottom line.

Second — and maybe more important — is the hidden cost of making decisions based on misleading or irrelevant metrics. What if, for example, you measure how much time your sales reps spend on the phone, and now you’re confused because you’ve gotten them all to reach new heights of phone time — but without a corresponding rise in sales? Talk time on the phone can be a good metric, but if it’s generated by reps’ having long conversations when they could accomplish more with short ones, or by reps’ wasting time talking on the phone to weak prospects, it’s the wrong metric to rely upon.

It’s easy to find yourself measuring the wrong things — because what was once useful to measure no longer is, because we haven’t adapted old metrics or tools to new contexts, because we’re stuck measuring what we can measure instead of what we should measure, or simply because we’ve been mistaken about what’s beneficial.

If you find you are measuring the wrong things, it’s not the end of the world. Figuring out your mistakes means that you’ll better understand your business, or even just your personal processes. And it should open your mind to finding the metrics that do work for you.

What do you measure? How do you know when to re-evaluate your metrics?

~

Related post:

• Build a hustle-meter!

~

Photo by Joel Penner.