Solve life and business challenges with metrics.
Before starting this article, I looked at Amazon and discovered over 17,000 book titles I could buy on metrics.
I then popped the word metrics into Google (Feb.2017) and almost fell off my chair with the offer from 115,000,000 results.
So, choice it seems is not something we lack or are short of when it comes to metrics. Do you feel the same? How many metrics do you manage or influence? This challenge will continue to escalate if leaders do not take control and stop to measure everything.
There is a popular belief within management that the more you measure, the more you know.
These steps give greater opportunity and insight. The process and thought is supported with the increased benefits seen through analytics and the birth of big data.
There are many managers and companies struggling with too many metrics. See this article on how to deal with an overabundance of metrics.
The Managers Metric Dilemma
Most metrics come from good meaning and it is easy to trace a logical path to its origin.
The metric is often seen as an absolute measure with little priority differentiation between it and another metric.
An enthusiastic new manager will discover an issue or new trend and then create a new metric around it.
Question: When have you seen a metric created after an incident? Is it still recorded after the incident is well under control?
When reviewing the benefits of your metrics consider their weighting, meaning and methodology in design, use and management.
· Weighting – Not all metrics should be considered as equal. A weighting classification for metrics help identify the resources, escalations and time needed. This proportionate approach leads to decisions and higher impact of the results.
· Meaning – Metrics are created and perceived in pure numerical terms instead of linked to a wider business vision. The meaning behind the metric is important to gain buy in from staff and enable each person to understand the impact of variations. Seek a trace between the business strategic goals and objectives.
· Methodology – An established metric may not offer the most optimal method to resolve the behavior observed. Resistance to change of metric design becomes based on opinion and not designed facts. The management priority becomes reacting to fixed focus points instead of a wider understanding of a clear business goal.
During a weekly meeting a manager asked. "Where are we at with our return counts?" The responsible team leader responded. "We cleared our three priority one product errors, fixed four priority five defects and eliminated a record twenty six priority three errors. A busy but good week, right?"
The manager replied, "Our key customer reported seven priority one errors, three priority two defects and thirty two priority three errors. You’ll need to work much harder this week."
The tone of this feedback and reporting is about improvement as opposed to creating a satisfied customer. The original measures and classifications need to updated as client and market expectations change over time.
In this case, the focus is on reacting to defects instead of understanding and learning what makes good product and a satisfied customer.
You become what you measure
At the start of each year one of the most popular New Year’s resolutions is to lose weight.
People go on a calorie hunt and then give up only a few months later. Short term improvement is lost in the medium/long term due to daily temptations.
The same applies to business organizations. Controlling a simple metric appears to be efficient, clinical and easier to manage.
The truth however is different. Weight loss management improves through the measurement of a healthy lifestyle in the medium and long term.
Within business, the recognition of each contributing factor for strategic goals is more important than a single metric.
The reported record low levels of employee engagement highlight the risks of measuring minor metrics. If you measure and manage many small focus metrics, your business is at risk of missing high impact results.
Top Tip: Explore the coffee break conversations about micro management and narcissist leaders.
Goals to metrics
A frequent challenge for managers is to define the correct metrics that provide the biggest value and impact. Several sharp readers of this article will understand the context of that prior sentence.
Individual metrics are captured through a review of existing recording systems, specifications and experiences. The new threat to this approach is real time data.
Managers become excited at the ability to measure real time information. A challenge with such temptation is to remain disciplined and focus on predictive behaviors instead.
Each metric should be traced to a goal and thus highlight both the purpose and impact level.
Example: An average business blog averages between 300-800 words. Yet, Google prefers original content and has proven more favorable to articles of 1800 words. Our business model is not influenced by these numbers and metrics. The figures inform us what the market is doing, yet we focus on what is best for our clients and readers.
Top Tip: Engage active participants at all levels to create relevant metrics that link to common business goals.
Steering the data ship
Have you reviewed a set of metrics where the performance was deemed a success and under control? These flat line graphs record no trends. The performance is flat. In such a case I suggest to use a reporting by exception system.
Making the correct decisions based on relevant data is important to create the most value from your metrics.
Steering the behavior of measured performance is done through the use of trend spotting on metrics. Anticipate performance and create response to trends.
This is an important management task that helps maximize efficiency of resources.
For large organizations the interdependency between departments can impact heavily on metric areas. The use of trend analysis offers insights to the weighting impact of each department on a metric. This insight can be of great use to the business to influence priority and break down silo behaviors.
The life span of metrics
Many leaders manage the same metric for months and years. Consider an opportunity to cut metrics sooner. The job of a manager is often described as “to manage”. This implies a status quo situation. If the job title was to be an “innovator”, then performances and attitudes might change towards metrics.
Instead of a culture where performance is managed and maintained, you create a business culture based upon innovation, improvement and positive disruption.
Business Problems Solved with Metrics
A business should review its relative position in the market and the desired place in the market within a given time frame. From that view point, a strategy and goals can be created.
The goals then identify the required metrics to support the business direction. Once the business has metrics under control, high impact metrics are identified. A risk and benefit change the metrics is a task for management.
Making a difference
The metrics you report should only matter if they make a difference for the business problem you’re trying to solve.
The companies that deploy big data analytics, still run the risk of business failure with companies that do not.
Companies that deploy a supportive management system to allow metrics to solve business problems will be the ones left standing before, during and after the next recession.
This leads me to review some of the earliest influences in leadership and metric management. It is time to challenge and re-position old established thoughts. It is time to use new and more relevant ideas to match the evolution of management practices and phase of business development know how.
Peter Drucker holds one of the most respected historical influences in business leadership; his quotes are heard daily from board rooms to the shop floor.
I put forward today a proposed replacement to his views to bring management to the 21st century using the benefit of experience since his work has become established.
Change the metrics quotes
What gets measured gets managed. – Peter Drucker to Measure to solve problems. – James Doyle
There is nothing so useless as doing efficiently that which should not be done at all. – Peter Drucker to
Metrics matter the most on high impact behavior – James Doyle
Seek to solve problems for your market, customers and make these the drivers and deciders for metrics.
This will provide the solution for every manager and business to solve the biggest problems with managing metrics.
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Written by James Doyle, founder of JAMSO. We have over 200 free articles, tools and resources for your success, including a great newsletter, subscribe now.
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