How Relevant Are Your Metrics?
Sound metrics allow employees to understand exactly how their day-to-day activities are tracked and how their work impacts successful execution. Moreover, good metrics can foster and reinforce the behaviors that lead to results.
Depending on your strategic intent, these behaviors may lead your organization to innovate (by fostering collaboration), to reduce costs (by systematically rooting out inefficient processes), or to deliver outstanding service (by measuring client satisfaction for example).
In our work helping clients to improve their ability to execute on their strategy, we often see these challenges with metrics:
A dashboard that includes metrics added over time, but is no longer relevant
Some “vanity metrics” are designed to always deliver positive values and cast their owners in a positive light
Dashboards that are shared only with executives and managers
Budgets that progressively drift away from alignment with the strategy, especially when organizations aren’t using Zero-Based-Budgeting and budgets are carried over year after year without substantial, critical review
HOW MEANINGFUL ARE YOUR METRICS?
Answer the questions below. If you answer “No” at least once, you may need to review your current metrics to make sure they support your strategy execution.
Do you systematically consider and act on every metric you track?
Do your employees have full access to the metrics that track their activities?
Are your metrics out of date when it comes to guiding today’s work?
Is your budget fully aligned with your strategic priorities?
When we help clients achieve execution excellence, we focus on metrics early - as soon as the strategic priorities have been identified. We like to see good metrics hygiene based on simple guidelines:
First, metrics have to track all the key drivers for execution. There is a massive body of research on balanced scorecards and we encourage clients to consider all of the elements of their strategy while focusing on their key drivers for execution.
Most of our interventions include the removal of irrelevant or outdated metrics that no one dared to remove until now.
Second, the leaders’ role is to communicate their strategic intent broadly; it is also to make the underlying metrics equally visible and accessible to all. At a minimum, they should report on company-wide metrics once a month.
Let’s use a bowling alley analogy: what if the pins were hidden behind a curtain? How would you adjust your aim and technique? Employees need to keep score of how well they are performing. In other words, remove the curtain and let them adjust their aim accordingly.
Third, employees should be empowered to act on the metrics that track their activity. People fundamentally want to perform well; this requires the ability to assess their own impact and the opportunity to improve and develop.
Finally, budgets should be aligned with the strategic intent as operational metrics. Just like metrics, budgets tend to inflate over time or become disconnected from business goals if they are not regularly re-assessed against the strategy. No manager likes to see their budget cut, but that discipline is essential to remain focused on the essential strategic intent.
In our next blog, we will consider the impact of a well-designed organizational structure and focused activities on your ability to execute well.
How well is your business executing? To find out, please reach out and we will initiate an assessment of your execution capabilities.