Metrics are great. As a manager they allow you to keep a focus on how your business is performing. The lengths to which some companies measure performance is astounding. There are a range of hard metrics available to managers today including elaborate financial reports and dashboards (covering revenue, gross margin, profit etc), human resource statistics (including payroll costs, leave balances, staff turnover rates etc) and softer metrics such as employee engagement surveys, employee sentiment pulse polls, customer feedback and shareholder satisfaction ratings.
Well devised metrics enable managers to drill into the effectiveness of key inputs that drive the results, down from an overall organisational level, to business unit, team and each individual.
They can be used to assess how the organisation and its individuals are progressing towards their goals.
The disconnect – measuring needs managing
Measuring performance is common practice in the business world. However there is often a disconnect between the measurement of performance and the management of performance.
What’s the point of measuring if you don’t use the feedback to manage?
The phrase “what gets measured gets done” is often quoted, however just because you measure something doesn’t mean it results in the desired outcome. I can keep track of the number of interviews our recruitment division conducts with job seekers, but if we don’t place any of them in jobs should I bother measuring this? Yes I believe I should, but I need to dig deeper and understand who we are interviewing, why we are interviewing, how well we are interviewing and if we are not successful in placing them into a job, understand why that is. It may well be that the problem lies not with the candidate quality or interview process, instead with the job order we’ve taken from the client… perhaps it was too brief, misinterpreted, or we didn’t really listen to what the client was really asking for resulting in shortlists that missed the mark.
With further context comes the opportunity to identify trends (eg. poor interview skills may be leading to a lack of understanding of the candidates key competencies hence opportunities for placements are missed). Once trends are identified you have the opportunity to do something about it through an appropriate performance improvement initiative (eg. training).
Measuring the things that matter
Measuring the right things (ie. the things that matter) and managing them effectively to promote outstanding results is the connection needed for every manager. Otherwise a great deal of time and energy can be misspent measuring everything and implementing corrective actions that don’t address the core issues.
I recently met with a new client prospect to learn about her company, her role and the challenges she is facing, to explore if our services could be of value to her or her organization. During the meeting, she illustrated the lengths to which her company measures all range of things including sales growth, price fluctuations, market share, payroll costs, staff engagement and customer satisfaction. As she was explaining all the things she is required to measure, she kept rolling her eyes and smirking.
I noted her skepticism and asked her opinion on the metrics her company was using.
“We measure everything… and not just our company but our parent company too!” she told me. So I picked one of the examples she was telling me about, being the parent company annual staff engagement survey, and I asked her to explain its purpose to me. “Oh, here it is from last year and we’re about to do another one” she said as she plonked a heavy document on the table. She told me most of the questions were completely irrelevant in her opinion and they seemed to go on forever. When I asked what was done with the information, how the company had communicated the results back to the staff and what business improvements resulted, she looked at me and shrugged her shoulders… “not much so far as I can tell”.
So I asked her, if you were CEO what would you measure and why. “Easy” she said, “I’d regularly measure the things that matter so I can use the information to make decisions and take action to make us better. I certainly wouldn’t measure everything under the sun and then sit on the data for months doing nothing”.
Managing the things that matter
Managing the things that matter is vital. If too much data is gathered you can get lost and “not see the forest for the trees” and therefore manage ineffectively.
In his article What Gets Measured Gets Done… or Not, Stephen Gill highlights that measurement is not so much the problem, but “the problem is the lack of will to use data to continuously improve systems and the lack of a process to interpret and apply data for continuous improvement”.
If you choose to measure the performance of your organisation, take steps to put context around the data, then make business improvement decisions and communicate the actions to the business so the people who have been asked to give feedback can recognise that their voice has been heard and steps are in motion to improve (regardless of whether each individual agrees with the actions, most will appreciate the fact that you’ve listened and something is being done with the information).
To measure or not to measure?
A good rule of thumb when asking this question is, are you prepared to put further context around the data you receive and then actually do something with the information? As Jane Bozarth from Learning Solutions Magazine wrote recently, “when looking for measures, try to find things that are meaningful, that give you real information to help real people do their jobs and to help organisations perform more efficiently. Beware of easy measures and vanity metrics”.
I couldn’t agree more.
Ben Walsh – General Manager; Recruitment