Most companies either try to measure too many metrics, or they measure none at all. Even those companies that only measure a few key things rarely look at their numbers enough in any meaningful way to give themselves any insight into the numbers.
We’ve all heard the saying before: We can’t manage what we don’t measure. However, the key is figuring out the “five w’s of metrics”: who should measure metrics, what to do with the data, when to look at these numbers, where to look for data, and, of course, why to measure at all.
Here are the absolute best basics to get you started.
Each business area of a company should have its own dashboard for metrics that rolls up to an overall dashboard for the entire company. To start with, though, think about what key numbers each business area should look at in order to determine if they’re successful and staying on track.
An easy way to come up with a list of key metrics is to sit all the people from a business area in a room. Show them the key goals for the company for the year and ask them to write down as many metrics or “Key Performance Indicators” (KPIs) that they think their business area should measure. Once you have this all-inclusive list, you’ll easily narrow them down to the TOP 10-15, and even the most critical TOP 5 meaningful metrics for that area.
Once each business area’s metrics are nailed down, you should also be able to assign two to three key numbers to each person in that area. What are the key data points you can measure to help keep people focused, grade their performance, and keep them aligned with the important areas and numbers for the business unit they work in? In my role as a Business Coach or Business Mentor I have to help CEOs see the data they should be looking at.
Remember: it’s not about measuring everything. It’s about measuring and monitoring the right things.