Metrics and Measures

It’s been said that what gets measured gets managed and what gets managed gets done.  But, are we measuring and managing the right things?

I have watched the Olympic trials, Major League Baseball, and the major golf championships.  In each event or contest, the results are always featured – the winning times, the box scores, or the low round of the tournament.  But, the analysts for these events talk a lot about other metrics like time off the block, ball speed, and exit velocity.  These are measurements on which the athletes focus because they know if they get these numbers right the results will take care of themselves.  They are focused on the stats that will predict their success.

Business owners sometimes focus too much on the end results – cash in the bank, profit or loss, and top line revenue.  These are important numbers, but they are typically a historic measure of activity that has already happened and therefore impossible to change.

In contrast, business owners who identify, measure, and manage leading indicators make positive changes to the activities, efforts and work of their team that result in higher levels of performance.  They measure sales activities because it drives higher revenue.  They measure team productivity knowing it drives higher margins.  They track customer satisfaction as it is tied to repeat business and higher sales.

Have you identified the key leading indicators in your business?  Do you have a scorecard that helps communicate these things and hold people accountable?  It may take some time to dial in the right metrics and measures, but doing so will help you proactively manage the performance of your business.