|CEOs: just start measuring||| Print ||
|Friday, August 17, 2012|
BY TOM COX
“It is better to be approximately right than precisely wrong.” — Warren Buffett
For every leader who loves numbers, there is a skeptic. They both have points — without measures, we cannot tell how we are doing, yet many metrics seem arbitrary or measure the wrong thing. Meanwhile, often the right goals seem immeasurable.
To make the best use of metrics in managing a team or an entire business, take the best of both perspectives. Here’s how.
Just Start Measuring
Start measuring, in order to create a habit around measuring. Once people cannot escape all measures, they’ll start to push to improve the measures. And the flaws in your metrics will quickly become apparent.
Generally metrics fall into three categories:
1. Quantity – how many we did
For each function or team or group, pick one metric in each of these three categories, centering around the group’s mission. I recommend having daily metrics, in addition to slightly more elaborate weekly or monthly numbers. When you have your daily huddle, report the prior day’s metrics, and include a line graph or other visual of the prior numbers.
For example, in my work as an interim executive, I will frequently manage a team or department. For a group of medical assistants, who had a mission to serve patients quickly and with great care, we would measure:
1. Quantity: Number of patients each day
For a group of IT support engineers, who had a mission to fix customer problems quickly and correctly the first time, we chose to measure:
1. Quantity: Number of cases closed
Your best results with metrics will come when you treat them like a flashlight – to illuminate a situation – not like a club with which you bludgeon people.
Metrics that Motivate
When you give someone clear feedback that shows them they are making progress on a topic they care about — a worthy goal — that sense of forward movement is inherently rewarding. This is the subject of the outstanding book “The Progress Principle.” (Listen to my interview with the authors here.)
Metrics and Strategy
Pick some numbers to track in these four areas:
1. Learning, Personal/Professional Growth, Alignment
It’s smart to have 4-6 key metrics in each area.
How to Measure Anything
This claim always generates push back by people who either haven’t thought their outcomes through, or who think “measure” can only ever mean “measure precisely with a meter using an internationally defined standard unit.”
Here’s a way to create a “good enough” and “useful enough” measure on a squishy outcome. Suppose you want to measure “employee engagement.” What does that even mean? How could you possibly measure it? Why would anybody believe your measures if you reported them?
Some best practices for devising metrics for hard-to-measure things:
* Visualize what the result of this thing is
So, for “employee engagement” — suppose you suddenly had a lot, lot more of it. How would you know? What would you see, hear, taste, smell or touch?
Maybe, if employees were “engaged” more, their morale and productivity would be higher. They might treat customers better. They might not get discouraged and quit. Maybe they would volunteer more ideas.
So, are any of those aspects of “engagement” measurable? Yes, some are. For others, we need to decompose them more.
Morale – measurable with an employee survey
Think you have an outcome in your business that “can’t be measured”? Email me. Examples will be posted here, and anyone who stumps me will earn a cup of coffee on me, at a place and time of our mutual convenience.
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