Leading starts with knowing where we are, therefore we must consistently define and track the most important metrics. All organizations, even the largest, can be broken down into a small quantity of core metrics. For example, our organization’s key metrics can be broken down into the following. Customer Retention Rate, New Contracts Received, Project Management Pipeline, Service Bureau Production, and Profitability. Are these all the metrics we track? Of course not, we actually track more than 60 performance metrics, however, the majority of them all are indicators or support metrics for what is happening to the core metrics. They allow us to figure out why this or that is happening.
Regardless of the organization, department, or even the particular role we are responsible for as leaders, our success can easily be measured through applicable core metrics. More importantly, they can keep us sane because stress comes more from “not knowing”. If things are good or bad we want to know, however if we are not tracking the indicators how do we know when or how to react? Consistent results and growth come from consistent tracking and team focus on the results. There are signicant negative effects to not defining and monitoring the core metrics. People become delusional and begin to just hope things are going well or that nothing bad will happen. In addition, the same mistakes are consistenly made, which prohibit progress and cause frustration for customers and team members.
If employed, we are responsible for a certain level of performance. Therefore, understanding and monitoring core metrics should be done regardless of being a “numbers person” or not. Globally, no one person can effectively handle the job of tracking and worrying about every single aspect of an organization. We have to rely on each other, and from a leadership perspective, all performance is a roll up of the team’s effort. For example, a sales manager needs to focus on the company’s total sales number, but each sales team member must focus on their own metrics in order to contribute. When the total sales number is not being met, the sales manager is likely going to put some extra time and attention into working with certain team members that need to improve.
What to track is known if the organization and it’s team members have a clear understanding of the goals and factors that will lead to success. In turn, the probability of success and of lower stress, will be much higher. Even if the metrics are trending in a negative direction, at least we know and can now do something about it. There is a reason we had report cards in school. They tracked the key metrics that really told us and our parents if we were paying attention, working hard, and doing our studying. Well guess what? We still need them if we want to be on the deans list, and to realize if we succeeded or failed.