Why Metrics Matter
Metrics provide an insightful road map for corporate performance by evaluating factors that are crucial to the success of an organization. However, one of the biggest challenges for many of today’s top executives and managers is designing the right set of metrics to drive their businesses forward. Metrics can be a powerful tool for informing and guiding decision-making, as long as they are executed effectively.
Define Your Metrics
Having a clearly defined set of metrics allows your organization to benchmark its success and create a repeatable process. Using the SMART model will help you define precise and realistic goals. The ‘Achievable’ step is particularly important. Creating objectives that cannot be achieved, will leave your team members feeling defeated before they begin.
Design Your Metrics to drive desired behavior
Performance metrics need to be developed thoughtfully in order to encourage and measure the desired behavior of your team members.
The key to developing effective performance metrics is to analyze the different intended and unintended ways an individual could meet the metrics as defined. Putting in place the right metrics and providing them to your teams will show a clear path to performance improvement. Performance-based metrics send a clear message of which activities are valued and should be prioritized ultimately increasing efficiency.
Align your metrics with your strategic goals
To be relevant, key metrics must tie back to specific department and organizational goals. Before creating each metric ask the question “What does success look like and is it aligned with our strategic vision?” If a metric does not tie back to your goals it should be removed to avoid noise and confusion. Don’t limit metric alignment to just senior management. Get members of your organization from all levels involved. Frontline employees may have ideas senior management may not have thought about.
Utilize your metrics
To make metrics effective, your employees need access to the most relevant and clear-cut information. Modern business intelligence and corporate performance management software allows you to better visualize and analyze your data by organizing it into real-time dashboards. These dashboards pull the most current data from all of your different business systems to create visual depictions in one convenient location. Choose a system that allows for both access via a computer and mobile devices for maximum accessibility. Allow your teams to react to problems quickly to ultimately boost profitability and business performance.
Metrics are essential to align your teams around your company’s strategic goals.
Creating effective, timely metrics and distributing them to your teams in real-time will focus your entire organization, drive employee behaviors, and result in reduced costs and increased revenue and market share.
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