If what you measure drives your team…

If you measure your sales person on the booked revenue, she will focus on ‘closing’ deals, irrespective of whether they are ‘good’ deals for the company with respect to profitability and building reputation. If you make the bonuses of your journalists dependent on the number of articles generated, they will focus on getting that number up irrespective of whether they meet the desired depth and quality to make you a respected publication. If you measure your engineering team solely on the quality of code, they will never ship anything in pursuit of a utopian code base irrespective of how the users feel about the software.

Quick Metrics Trap

We already know this intuitively. Yet, time and again, we fall into the ‘quick metrics’ trap. It is easy to understand why:

  • If you nail down a metric, any metric to track, you are suddenly absolved of all the confusion in your mind on how to know if you are on the right path with respect to your product / project. It is hard to live with confusion
  • A metric is a great way to rally around for your team. You can show momentum and get the team cheering as the metric shows progress
  • It is easy to get a sense of movement and progress when you see a metric moving up and to the right. It gives you a feeling of control

To be sure, I am not referring to ‘vanity metrics’, which are just great to talk about at conferences and among your peer group, but have no bearing on the core fundamentals of your business. I am referring to the incorrect metrics chosen by entrepreneurs, product managers and salespersons who genuinely care about making a difference.

How To Choose The Right Metrics

  • Create instead of choose – In many cases, a single number, though enticing, may be the wrong path to take. The answer usually lies in choosing a combination of numbers or one metric along with a set of constraints. An example of the former may be “number of sign ups on your SaaS app coming from digital marketing source with a 3-month paid conversion”. An example of the latter may look like “number of articles while ensuring that every article meets SEO guidelines & 10% of all articles have the potential to become authority pieces in the domain”
  • Be okay with ambiguity – While the temptation is strong to pick a metric right at the start of product development or project or when you take over, be comfortable with not knowing what to track, until the contours of the outcome become clearer with time. It is okay to say that you are still figuring out the metric that has the potential to move the needle on things that matter rather than get on to a tiger for a ride you wish you hadn’t gotten on to – It is hard to move away from tracking something that seems be liked by everyone because their way of working is geared to beat that metric benchmark
  • Get your team on board – Finding the right metric need not be a solo exercise. Your team may have additional perspectives that can give you ideas on the right things to track. Plus, there is the added advantage of already having them aligned with the metric even before going ahead with tracking it