Make Your Own Metrics

If your car's speedometer displayed temperature rather than speed, combined your speed with those of nearby cars, or gave you just your average speed for the preceding month, you'd get it fixed, right?

Or, would you just "go with your gut"? Then say, "But Officer, it felt about right, and besides my broken speedometer said I was doing fine!"

You can't drive well with a lousy dashboard, and you can't lead well with lousy numbers, either.

Do it yourself

Rather than relying on or complaining about your company's insufficient reports, make your own dashboard.

Identify three to five business imperatives for your group. Typically, your imperatives will include something about...

• Delivering tremendous value to your customers

• Creating outputs

• Partnering in and out of the organization in ways that create even more value

• Developing your team to be ever more capable of doing all of this

For each imperative, come up with several smart measures that indicate your group's degree of progress and success. Having created top-level dashboards for multi-billion dollar companies and tiny nonprofits, I've learned to start with the right questions, rather than reach for whatever data is handy. The key questions are always, "What will give us early warning as to how we're doing?" and "What will show us the key factors driving performance up or down?

Here's what to look for in choosing measures:

• Select leading rather than lagging indicators, as much as possible (How many customers clicked on the service contract page and the percentage that bought a contract, rather than service contract revenue)

• Pull from data you can find or reasonably estimate monthly

• Make sure you can learn the precise origins of the data and understand their weaknesses

• Look to a variety of sources, incorporating market as well as company data

• Create new data streams when needed. Tally something at the front lines. Negotiate with an upstream unit for earlier data. Make an index from public financials

• Ask for lots of input on potential metrics, especially about data quality, ease of pulling data, interpretations, and credibility

• Choose at least some of the metrics to be especially credible to your team, executives, other functions, and even customers

Put together a monthly dashboard

At the simplest: Make a spreadsheet, one page for each month, with your measures as rows, organized by imperative. Columns may include this month's data, last month's data or three-month rolling average, and this time last year, whatever you consider relevant. Include a column to color green, yellow, or red and one for any critical notes on reasons or data.

If you're new to thinking about measures, there's plenty of material online about balanced scorecards, executive dashboards, etc. Make a good start, commit to doing it, and improve as you go.

Think about implications

Block two hours each month to consider what this means and what more you need to know to interpret and make use of the data. Gather with team members and consult your best peers. Ask:

• What's in flux and what's stable? Why?

• What are we doing that creates these results?

• What's really going on?

• What happens if we keep doing what we've been doing?

• What are the highest-value changes we could make? And, what are the implications for risk?

• What metrics would be even more revealing than current ones?

Communicate!

You've got the goods now. Becoming the person with good numbers is a handy addition to any personal brand. More important, you'll use your deeper understanding of the metrics to focus your team on what matters. In addition, as you become a devoted student of the sometimes unobvious relationships between cause and effect, you become a more valuable strategic thought-partner to your leadership and your customers.

© 2012 Pam Fox Rollin