I was sitting in a meeting last week with one of the companies that I am working with. It was clear that the team was struggling to agree upon the “definition of the situation.”
By that I mean that there was no consensus on either the key milestones that were most integral to the company’s success or the primary challenges the company needed to overcome to realize its potential. This prompted me to ask what the “metrics of success are.” The team couldn’t answer, leading me to quote a truism of business: you can’t improve what you don’t measure.
In business, there is strategy and there is tactics. Strategy is the big picture, the long term game plan. Tactics are the little picture, the step by step increments for getting from Point A to Point B.
To determine if the tactics are working, it is important to identify the key indicators of success in as qualitatively quantitative terms as possible and track them rigorously and religiously, making them transparent to the organization. This ensures intellectual honesty within the team and creates dissonance when what the team is asserting is out of sync with the metrics of success.
While obvious metrics of success are sales relative to sales goals, other metrics can pertain to number of customer wins that are in production or reference-able versus problem accounts. They can track number of qualified leads generated or press mentions. Similarly, if your company’s strategy is to up-sell existing customers to get them using other products in your portfolio, then metrics would explicitly track number of up-sells in a given month. Alternatively, you might be tracking percentage of wins versus losses when facing your best competitor in head-to-head situations.
To be clear, less is more when it comes to defining and tracking metrics of success since at a certain point too much data dilutes focus.
So what are your company’s metrics of success?
Related Links:
- Hold a Picture in your Pocket: Cognitive dissonance and manifesting change.
- On Intellectual Honesty: See things as they really are; act on that knowledge.
- The Five Keys to Business Success: The most important drivers to entrepreneurial success.