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Leading: How to measure what matters

July 26, 2017 -  By

It’s exciting to lead a talented and energized team, working together in an environment of mutual respect and trust. For the leader to get the most out of all that effort, however, requires a conscious effort to measure what matters. Without clarity regarding goals and what constitutes “success,” a team cannot sustain a high level of performance over time.

Human nature tends to value competition and keeping score. High performers want to know how they are doing, relative to their own best efforts and those of their team. Achieving a new personal best is inspiring, but when your entire team wins, it’s exhilarating to feed off the positive energy of others. Nothing fuels success like success!

Think about the popular sports you know and love. All the action and great plays are exciting, but common elements include critical scores tallied throughout the event that: a). let team members and spectators know how things are going, and b). roll up to the final score. There aren’t typically dozens of measurements; there are a handful of key ones that tell the story. In sports, we measure what matters. Business performance should be tracked the same way.

There’s no magic number of measurements or “metrics,” as they’re commonly called. The ones chosen should be relevant and timely indicators of: a). how things are going in the current period, which could be a week, month or the year-to-date, and b). roll up to overall reported results at the end of the period.

How should a leader determine what to measure and report?

I’ve found it best to begin with the end in mind and clearly define what a winning score looks like. For example, what levels of on-time service performance, customer retention, sales growth, profitability and safety will define a winning season? Next, break down those final results into the game-time, play-by-play and series-by-series actions of the teams who will produce those results. Consider how “if they do this,” then “it will become that.” Measure those crucial results during the game and keep score for the event. Here’s why it matters: Visibility creates awareness and awareness drives accountability.

Let’s lay out a specific example. Suppose retaining your customers is a big deal. (Hint: If it isn’t, it probably should be!)

  • The overall score for the year might be percentage of revenue retained at year-end, compared to the base of work on the books when you started the year. It also could be number of contracts or whatever metric is most meaningful for your business.
  • That annual retention target is then broken down to a month-to-month basis, and actual losses are accumulated and compared to the running target total. (Think golf: Are you over or under par?)
  • Keep this information timely and make sure that everyone on your service delivery team understands it and can see the score develop over time.
  • Talk about key renewals (birdies or eagles) and dissect the reasons for any losses (bogies) when they happen. Repeat what is working and take corrective action for what isn’t.
  • These insights may lead to tracking some supplemental metrics, such as customer survey scores or key client touch points.

This sounds simple, right? It is, in one sense, yet many businesses spend more time trying to figure out how to guard information than how to share it. If you expect your team members to do well and continuously improve, they need to know how they’re doing.

What are the five or six “big things” in your business? Designed thoughtfully, measuring what matters will determine your overall success in the short run and, therefore, your ultimate score in the game of business.

Photo:©istock.com/meltonmedia

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William Dellecker

About the Author:

William (Bill) Dellecker is the Chief Development Officer for HeartLand and the former executive vice president of Yellowstone Landscape, located in Bunnell, Fla. He also writes regularly about business and leadership on his personal blog, cultivation(s).

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