Are you measuring the right things?
Wednesday, April 17, 2019
The good news about today’s technology-enabled world is that we have the ability to measure just about anything — from the number of clicks on an ad to the amount of time you spend on your iPhone, how many steps you take during the day and the number of times you hit the brakes in your car.
And the bad news is that in today’s technology-enabled world, we have the ability to measure just about anything. We are literally drowning in data points — some of them more useful than others, but all of them screaming for our attention.
How do you determine on which measurements to focus? Do you start with the data that’s most accessible, or wait until you have results that perfectly match what you’re trying to measure?
Here’s the key point to remember: What gets measured gets managed.
That means where you center your attention will dictate the behavior of employees, customers, or suppliers. There’s an old saying that sales people are coin operated. Tell them where they’ll get the most commission and they’ll go off and sell that product and service — ignoring something that might be just as good but for which they are not getting richly compensated. This focus applies not just to salespeople, but to everyone in your organization.
When I worked for Sun Microsystems a number of years ago, the IT team was compensated for deploying a certain number of new systems internally. No one wanted these systems because they weren’t really what we needed. But the metric was units installed, not units used.
So the IT folks came along, installed these in the corner of each office, and went away. They met their goals, we were not bothered, and the organization did not gain from this effort. That’s what happens when you measure the wrong things.
How do you know you’re measuring the right things? Consider these points.
Focus on what really moves the needle for your business.
The number of clicks or friends or likes is good for the ego, but not necessarily for the business. Focus instead on external factors. Did your actions move customers and prospects closer to purchase or repurchase? And how can you measure that?
Use measurements that are specific and consistent.
Be very clear what you are measuring. Make sure you will be able to get accurate data on this specific measurement on an ongoing basis. Changes to what you measure should be made very, very infrequently and only after considerable thought.
Make metrics easy to understand.
I once worked for an organization that rewarded employees for meeting a goal for RONABIT (return on net assets before income and taxes).
The problem was there were very few people in the organization, including my team, who understood what this measurement was. There were even fewer people who understood how their actions might affect this metric.
Measure people on things they can impact.
If my performance is being measured on meeting a target, this should be something that I can change. For example, as a marketer, I can’t guarantee a new product will be available on time to customers — that’s out of my control.
But I can impact the message customers receive about the new offerings, as well as how and when they receive it. I can also put together marketing campaigns that drive prospects to take the next step in the customer journey.
Make sure what you measure is actionable.
It’s one thing to know that your organization either did or didn’t meet a goal. But it’s more important to look at the results measured and know what actions you should be taking next.
Remember: What’s measured gets managed. Make sure when it comes to metrics, your organization is measuring up.
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