Measurement is about paying attention to the right things at the right time. It’s not about enslaving yourself to meaningless numbers, and driving yourself mercilessly to achieve them. Unless, for your business, that is the right thing to be paying attention to. What you measure is what you and others will pay the most attention to and focus their efforts on. It’s what will grow and change about your business. Choosing what you will attend to shows others what you are committed to. Measurement is potent that way. Which is why some of us shy away from it: What if we choose the wrong thing to watch and people start acting in unexpected ways? Choosing what to measure and how to measure it is the tricky part.
WHAT TO MEASURE: Some Guidelines
Relax. If it’s worth doing – and it is – it’s worth doing badly. Just pick something, track it for a bit and see if it gets you the behavior and results you want. If it doesn’t, notice that and choose something else. If this is explicitly collaborative process – that is, you do it out loud – that’s even better. Then everyone sees that paying attention and making adjustments is normal, natural and everybody’s business.
Expect it to be awkward at first. Measuring makes performance public. This makes some of us squirm. We’ll adjust as long as the attention is fair, kind and has some connection with what matters, both to us and for the business. In fact, when you get this right, it’s like having the wind under your wings.
Some of what you pay attention to can shift over time. For a new business, a focus on cash flow is the right thing. Most new businesses find that their attention naturally goes here, because if cash flow isn’t primary, the business won’t make it to the next stage. For a more mature business, a focus on cash flow stunts growth rather than supports it. On a team, an exclusive focus on goals can lead to a lack of team behaviors. When you see team members undercutting each other, look at what you’re measuring and adjust it.
Some of what you measure will not shift over time. Your company values are on this list, as are the goals and performance measures that define your business. These two components make up your company’s identity. Measuring these is like checking your route you’re driving against the directions you got form mapquest: Are you still on track for your original destination? Are you still behaving according to the values you established for yourself? These two things can beat each other up – if you stop attending to one of them, that one will fall by the wayside.
HOW TO MEASURE
You can count anything if you can see it and name it, the more specifically, the better. Most of us count money, and count how many activities we complete. That’s a good start. Even better is finding a way to count results, rather than just activities. Is your 90% on-time delivery rate (an easy to count activity) pleasing your customers (the trickier to count result). They key here is to look for the observable behavior and count that. What do customers do when they aren’t pleased? Two things: They complain and they use someone else. So, count customer compliments vs. complaints and count customers retained and customers lost. Make sure to ask them why they stay or go.
What about so-called “soft skills:” How do you count those? Remember: If you can see it and specify it, you can count it. Let’s take the example of “teamwork.” Everybody wants good teamwork. Trouble is, we often don’t specify what we mean by that. This is like saying “I want to business growth” without specifying what you mean (more business in the stores you have, or more stores; more students in the classes you offer, or more classes, and so on). If we do specify what we mean, we don’t get down to the level of observable behavior – what do people who are team players do? How often, and with what sort of result? If you’re stymied at this point, ask yourself how you know you lack teamwork? Chances are, it’s because of something you see or hear. Behaviors are what you see or hear, like a lack of asking for help or receiving it. Turn these around – state them in the positive – set a target, and start counting.
You may also see a lack of teamwork show up in your business results, often in poor customer service, as when one team member throws a customer concern over the wall and hopes that someone else will attend to it, but without making sure this happens. “Throwing it over the wall” and “dropping balls” are two ways lack of teamwork makes itself visible. Turn these around, set a target, and count start counting.
Make it easy and if at all possible, fun. If it’s too complicated, you won’t do it. Keep it simple, easy to do and small. If it’s handled lightly and with humor, you’ll increase willingness a hundred-fold.
Change it up. If you don’t, everyone will start phoning it in or gaming the measurements you’ve chosen.
What’s your experience with this? Your wisdom is welcome in the comments below.