Significant business metrics are not related to the number
When it comes to business metrics, there’s a secret that top-performing leaders understand, but might not tell you out loud:
“Your customer doesn’t care about your internal report card.”
High-performing leaders choose a few meaningful business metrics that drive the right behaviors and achieve the results that really matter to their customers. In contrast, managers who haven’t learned this secret focus on the numbers and frantically rotate their team’s focus back and forth between twenty-seven different metrics—most of which don’t directly affect results. Not to mention that no one can concentrate on twenty-seven metrics at a time.
How not to use business metrics
I (Karin) saw the downward spiral that a flurry of business metrics can cause in a visit to a manager we’ll call “Sarah”.
I watched Sarah’s whole body tense up every time the hourly stack rating buzzed on her phone.
Sarah didn’t have to say a word. I knew that look inside out. As a Verizon contact center manager, I’ve been at the receiving end of such beeps for many years. Hourly results arrive 15 times a day – quality, efficiency, sales. When they were good, I could breathe and go about my day. But sometimes, that stack ranking was an hourly reminder of all the work my team and I had to do.
As my blast from the past continued, I was reminded of the added pressure, when those hourly stack ranks were followed by a call from my boss “Have you seen the numbers?”
Sarah interrupted my painful flashback. “I’m sorry, Karin, but I have to crowd the team. We have to get to 94 by the end of the day.”
“What do you plan as your key message?” I asked. Sarah looked at me like I was crazy. “Ninety-four,” she said. When I met with Sarah’s team later that day for a focus group and asked what success looked like, they told her, “Ninety-four.”
Well, at least they were consistent.
Sarah’s focus on the number increased pressure and pressure. It created more busyness and activity. But this focus on business metrics alone won’t help her team succeed.
Disruptive measurement
Here is an example to help explain. Imagine for a moment that you go to the doctor and she tells you that you have high blood pressure. The doctor prescribes medication, a change in diet and more physical activity. Assuming you are motivated to get healthy, what would you do when you leave the doctor?
You can go to a pharmacy, fill your prescription and go home. Once you get there, you can assess what food you have on hand and make a shopping list that includes whole grains, lean meats and vegetables. Maybe take a trip and start an exercise program that includes some yoga and stress reduction.
And yes, you would probably measure your blood pressure once a day.
Eat well, exercise and take your medicine. Continue these behaviors consistently, and your blood pressure will likely improve.
Now, imagine you leave the doctor’s office and go to the pharmacy, pick up a blood pressure cuff, then come home and start taking your blood pressure every fifteen minutes – after all, it’s important! It’s literally a life or death situation and you need to fix it. Every fifteen minutes you see that your blood pressure is still high.
Now you are more stressed.
So now you start checking your blood pressure every ten minutes, only to see your blood pressure rise even higher. And you’re not doing any of the meaningful activities that will help improve your health.
We don’t know any healthy people who have ever done this with their blood pressure, but when it comes to leading business teams, we see managers do it all the time.
How to make business metrics meaningful
Your blood pressure reading is important. And your business metrics are important – a balanced scorecard, with well-chosen key performance indicators, will strengthen your strategy and align actions with goals.
But managers who obsess about the numbers make a critical mistake: they focus on the score because they mistake the number for what it represents.
Your blood pressure reading is not your blood pressure. The score is a set of numbers that tells you what is happening in your body. It’s an indicator of health, it’s not health itself.
If you’re in law enforcement, the crime rate is an indicator of public safety, it’s not public safety itself. If you are in sales, your average sale per customer is an indicator of your relationship with your customers, it is not the relationship itself. And if you’re in customer service, your service ratings are indicators, not the customer experience itself.
No matter what metrics you use in your business, it’s important to remember that metrics aren’t what you do; Measurement represents what you do.
This understanding translates into how you communicate with your team. Managers who do not understand the difference between a score and what it represents will beat people with the number. They say things like “We’re 42, we’re 42, make it to 39!”
Instead, a manager who understands the difference will look at that number and use it as an indication of what activities, behaviors, and habits need their focus. When your blood pressure is high, you take your medicine, exercise, and change your diet.
When one of your team’s most important metrics isn’t where you want it to be, where should you focus?
Four ways to use data well
There are four ways you can use data effectively:
1. Know what is important.
Your grades don’t really matter. They are there to help you and your supervisors make decisions, but the grades . . . Do not do. . . material. (And some important elements in your work cannot be measured easily.) What is really significant? There is one way to find out. Ask: What does your customer or client care about most?
Your client doesn’t care what your team scored on your internal report card. No one outside of your team or your manager cares where you are in the rankings, how close you are to your goal, or what grade you got.
Customers care about their results. for example:
- How long do they have to wait, and can they resolve their issues to their satisfaction?
- Does your product work and meet their need as they expect?
- Are they able to do what they expect when they use your service?
- Do they feel good about it?
- Does it help them?
Your team exists to produce those results. The results—what you do for your customers or clients—is what matters. Focus on what matters most, and we guarantee your score(s) will improve.
2. Know the key behaviors that produce real results.
If you wanted to lower your blood pressure, you would know your key behaviors: take your medicine, eat well, and exercise. Similarly, there are core sets of behaviors that enable your team to achieve results and sustain them over time.
If you are a convenience store retail manager, your key behaviors may include:
- Maintain product inventory.
- Make sure the store is clean and tidy.
- Don’t let customers wait in line for more than three people.
If you are a customer service supervisor, your key behaviors may include:
- Cuddle up with your team every day to bond and communicate.
- Listen to conversations and provide balanced performance feedback.
- Connect to help solve customers’ toughest problems.
If you are a non-profit fundraising manager, your key behaviors may include:
- Building relationships with donors.
- Ask them to support the cause.
- Thank them in diverse and meaningful ways.
No matter what your business is, there are always key habits that build your meaningful results. Do you know yours? This is a critical step; You can’t improve your metrics if you don’t know what drives your success.
3. Emphasize key habits (not the grade).
Like a drummer in a band, you keep the beat for the team. Everyone can play their part when you keep time and anchor them in what really matters.
To keep your team on track, consistently communicate key behaviors and activities. “This is how we succeed: we do A, B and C.” All your communications—in team meetings, one-on-ones, email—will highlight these core practices.
When you do discuss metrics, put them in terms of key behaviors. For example, “When we do A, B, and C every day, we’ll maintain 80 percent plus return visits.”
4. Check the score at appropriate intervals.
How often should you check your metrics? The answer is: as often as necessary to keep you on track and no more.
In other words, it depends on what you do. To manage high blood pressure, a daily reading may be appropriate. If you’re driving a convertible sports car on the highway, you’ll need to glance at the speedometer every now and then to make sure you’re not getting a ticket.
For your business, a good guideline is to think about how long it will take you to see results when you implement a change. If you make a change today, will you see results in a day? week? a month? six months?
Different businesses have different time frames. Generally, you want to check your business metrics often enough to confirm positive results or catch problems when something changes, but no more than that. Otherwise, you’re wasting time and attention that you could be using to achieve the results that matter to your clients, customers, and constituents.
your turn
we will be happy to hear from you. What are the most significant business metrics you use? How do you keep yourself and your team focused on the most important habits and activities?
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