Getting started on your right foot in metrics
Getting started off on the right foot in metrics requires that you start with a strong upfront effort in researching metrics to be implemented. This is true whether it is an organization-wide metric, team metric, or individual metric.
Good metrics start with understanding and defining the purpose. Understanding the purpose requires you to ask what you are trying to accomplish by creating, managing, analyzing, and communicating your specific metric. It is also important to realize that oftentimes, multiple purposes are served by metrics.
Here are the seven different purposes metrics serve for us:
De/incentivize behavior: Metrics drive behavior. If you’re tracking the length of calls in a phone center, it may incentivize ending customer calls too soon. Pay attention to unintended behaviors. It is important not to assume people are rational. Having a way to monitor outcomes while at the same time not being creepy is ideal.
Reduce uncertainty: Metrics help reduce uncertainty by ensuring that everyone is on the same page in the same way. Making decisions gets easier if everyone knows what’s going on. Reducing uncertainty, of course, is not removing uncertainty. Part of the metrics around reducing uncertainty should also be around helping understand uncertainty.
Show progress: Metrics are often used to help show progress on something. Perhaps It’s a sales target, or tracking marketing spend, or completed tasks on a project. One important thing about showing progress metrics is being aware of repercussions, both positive and negative, of this progress tracking and display.
Communicate priorities: Metrics can be used by leaders to communicate priorities and showcase key areas of focus for their organizations. Simply showing someone that you’re monitoring the situation can help provide focus. With that said, when creating new or updating metrics, it is important to have a strong communication plan and not just leave the metrics themselves to communicate.
Define expectations: Metrics help guide team members in your organization and help provide a mechanism for driving decisions and actions for individuals, teams, and organizations. As mentioned above, communication in the rollout of new and updated metrics is critical, and this becomes extra important for people where metrics are there to define expectations.
Inform others: Metrics help inform others and keep them in the loop. It is important to provide context regarding metrics to ensure well-informed metrics consumers. For example, this may be a sales management dashboard to inform of current sales status.
Create alignment: Metrics are often used to help align people, goals, marketplaces, etc. The bigger the organization, the more challenging and important creating alignment as a metrics purpose is. Metrics with a key goal of creating alignment should be prepared to update and re-update metrics, as initial efforts are often far from perfect.
Understanding the purpose of metrics requires you to know the audience for the metric, including who is impacted and why, along with who and why wants to do the impacting. Further, understanding the purpose should include ensuring alignment with the organization's needs and strategies.
I have compiled a Designing Metrics That Work Quick Start Guide to share some of our experiences over the years. Our passion for this is deep, and I even conduct public workshops around designing better metrics and, of course, offer the same directly to organizations. The world and organizations are constantly in flux, and well-designed and well-implemented metrics are key to maximizing success.