Trust in metrics!

The human race is competitive. We compete everyday – either with other people or with ourselves. We set goals and we try to overcome them. We strive for excellence. The same applies to businesses – every organisation has a goal and they try to match it or better it – if you don’t others will. Simple as that – it’s a doggy dog world out there. You are either successful or others are.

To be honest I fully support healthy competition. Competition leads to progress and even if you don’t win you will learn something and more importantly if you are smart enough you will take those learnings on board and put them to practise so you can be successful next time.

In any race you always have a finish lane- which everyone has – but every winner also has smaller goals or milestones that will help you stay on track, measure and adjust if necessary. In order to track your progress towards your milestones you will use metrics. If you are running you will most likely track speed or if you are racing a car or bike you will most likely track horse power or torque.

The big question is – which metric are the right metrics? Is speed important for running? Maybe… But which speed?? Maximum speed? Average speed? Speed of legs rotating?? I believe it all depends on the type of race you are competing in… Is it a marathon? Maybe average speed is more important maximum speed… How about if you are part of an F1 team… will you look just at the maximum speed your car can achieve? How about drag coefficiency? or weight? either can be at least as important as top speed if not more…

So … looking at the above… we can deduct that having a goal is very important and having metrics is always a good idea but aligning metrics to your goal is paramount to success.

For simplicity sake we can look at a company as we would look at a Formula 1 car – a collection of components – each with its own set of metrics that will feed into the main metric – winning the race.

I remember one instance when at the start of the year during our first leadership meeting the CEO entered the room setting the new goal for the year and making clear which will be his metrics that he (and the company) are tracked on (the company was preparing to go public during that year) and asked each member of the senior leadership team to align their metrics to the main organisation metrics. Doing this he effectively set the company up for success by making sure that everyone works towards a common goal.

Over the next few articles I will list the metrics that each team can use as well as well as the best metrics that should be used based on different goals.

By : Cosmin Elefterescu