BL54: Do Metrics Matter

Bold Leadership podcast

We summarize Bill Zip's article in our latest episode...Do Metrics Matter. I have included his article below.

I’ve never met a business leader who’d actually say, “Oh no, metrics don’t matter to me.” Have you? I didn’t think so.

So why ask the question, “Do your metrics matter?” Because I’ve found the way most business leaders operate is like they’re practical atheists when it comes to metrics.

I know, I know that’s an odd phrase. A practical atheist is someone who believes in God, but lives like they don’t. So a practical metric atheist is someone who believes in metrics, but leads like they don’t.

Are you that kind of leader? Here are four questions to ask yourself to find out if your metrics really matter.

Question One: Are your metrics few in number?

The first indication that your metrics don’t really matter is that you have too many of them. Way, way too many of them.

That’s the nature of the age in which we live, we have lots of data. Big data, little data, and all kinds of data in between. Drowning in data, we never take the time to find out what the data means and count the things that really count.

Take for example sales, the field in which I have the greatest business expertise. You can measure close ratio, number of calls per client to close, net new appointments, forecasting accuracy, time in the funnel, velocity of execution by sales stage, average deal size, weighted deal size, proposals under consideration, probability of proposals under consideration, and performance against goal by week, month, quarter, and year.

You get the idea, right?

Most salespeople, when confronted with a barrage of data like this, ignore it all. That’s true of other people as well. A wall of numbers never get read, except by the most brave mathematical souls (not you and me).

And that’s too bad, because some of these metrics are essential to success. A head of sales who wants to make her metrics to matter will select the three or four critical ones to focus on like a laser, letting the inconsequential ones go.

I refer to this as the vital signs approach to metrics. Our vitals signs track the three or four things that are key to good health, like pulse at resting, blood pressure, body mass index. If any of those numbers are off, you take a deeper dive with your doctor. So too with sales. If sales are off, you take a deeper dive with your manager (known in the sales world as a strategic account review), but week by week you watch your vital signs.

In other words, the very first—and foundational—way to have your metrics matter is by identifying the vital few that make the biggest impact.

Question Two: Are your metrics predictive of performance?

So then, which metrics make the biggest impact? The ones that predict performance, not just report it. Let me explain.

If you’re driving a car, which would you rather be looking at, what’s ahead in the windshield or what’s in the rear view mirror? The windshield, of course, because that’s where you’re going. The rear view mirror only tells you were you’ve been.

Metrics that matter, then, are windshield metrics, leading indicators, not rear view mirror metrics, lagging indicators. While lagging indicators tell you some things, it’s too late for you to do anything about those things because they’re in the past. Leading indicators allow you to steer the course of your company into the future.

As important as windshield metrics are, it’s far easier to focus on rear view mirror metrics. Mostly because they involve less thinking. The data’s easily accessible and fairly easy to interpret. But the key to high performance is being able to shape the direction of the marketplace, not just react to it.

In other words, think! If you want your metrics to matter, use your brain to find the ones that focus on the future and actually predict performan