Metrics: Make a List and Check it Twice

"He's making a list, and checking it twice; Gonna find out who's naughty and nice." J. Fred Coots, Henry Gillespie

One thing these lyrics got right is the importance of having a method for evaluating one's performance. In a business, the list is more complicated than "naughty" or "nice," but it's vital to management to have a method of evaluation for each employee. Every business, even those in the same industry, has slightly different lists depending on the goals they've set for their business, but this month we'll examine how to start creating the metrics that you need to measure for every position in your business.

These metrics are like pulse points. They allow you to take a long-term view to evaluate if a position in your business is getting the necessary result expected of that position. In addition, they serve your short-term view as your warning signs. If you have set metrics and are watching them for each position, then your business is able to make corrections before performance has a long-term impact.

This week we're going to focus on what metrics you should evaluate for each position. Too many metrics and you simply won't be able to track and evaluate each metric. The moment your business doesn't pay attention to the metrics that you've outlined is the moment that they lost their importance. Thus, it's vital that you only select metrics that your business can and will donate resources to tracking and evaluating. To get started, we recommend starting from the bottom-up, prioritizing the list, and expressing activity.

Bottom Up: Start with each position in your business on the bottom of your organizational chart and, working your way up, ask what makes each position tick? What are the elements that the position needs to influence and achieve excellence in that position? Treat this step as a brainstorming session. Don't hold back or try to edit or prioritize these metrics right now, just create a list.

Tip: Reference your job descriptions for help with this step. If you don't have detailed job descriptions this is a great time to start a rough draft!

Prioritize: Take the first three metrics listed and put them in a list to the side ranking them in importance forming a top three (don't worry if these are THE top three, just rank them in relation to those three). Importance should be determined on the impact the metric has on customers, on the result of the position, and impact the metric has on the overall business. Next, take the fourth metric. Is it more or less important than metric 1? If more important than metric 1 then place it at the top of the list and move on to metric 5. If it's less important than metric 1 then continue down the list until you find where it goes on the list. This step-by-step process will force you to bubble the most important metrics to the top of the list rather than try to blindly pick them out of the list. Expect that this process will take time as it will force you to justify and sometimes talk through your decision.

Tip: Don't be surprised, if as you walk through this exercise you find some metrics that seem to repeat or that are just not that important to your list. Feel free to edit the metrics as you place them to get rid of or combine duplicates and to remove ones that are not ranking high on the level of importance.

Express Activity: Many times metrics are expressed in terms of end results such as "nice" and "naughty," but the trouble with having JUST result based metrics is that many employees don't know how to break those goals into action steps. We encourage you to document the result metric, but also express the actions that are needed to reach that metric when possible. For instance, your result metric might be, "Close on two accounts each week" and the activity might be, "Call 50 leads each week." For now write them side by side. Later this month we'll explore what to do with them.

Tip: Writing activity-based metrics give employees the perception of more control over the results. For instance, it's easy to assume and even make a good case that you can't determine if two accounts will close. After all we all know that timing does matter and sales is a numbers game. The excuse, while it might be strong, isn't good enough. However, it's pretty easy to take ownership if you did or didn't make 50 calls this week. There's less room to allow excuses and barriers to get in the way if activity is expressed.