Don’t Measure the Wrong Things
Metrics are important – but they can be deceiving.
If you measure the wrong things you can think you’re making progress when you’re not. There are many things to measure in a company and some are nested inside the others. Here’s how to make sure you’re measuring the right ones.
Where are you going? and How will you get there? These are different questions that require different answers. In business, they often get confused with the question “How are we doing?” To clear up the confusion, let’s imagine we’re taking a road trip.
Where Are We Going?
Our destination is our strategy and our goals. In that context How are we doing? is the measure of our progress, our milestones. In our road trip, we want to reach this city by nightfall, perhaps have lunch at this place. Using these milestones we can check if we’re on track.
These metrics fit well for things like OKRs and SMART goals (assuming they are done correctly). They are what I call Progress Metrics.
How Will We Get There?
We’re going by car. This means the car must be in good condition. We need to track that we don’t run out of gas, that the tires are OK and the oil pressure light doesn’t come on. In this context, How are we doing? is not the measure of our progress, but it’s the measure of our potential to make progress.
These are important metrics. But even if they are all in the green zone, it has no bearing on our actual progress. These metrics are called Health Metrics. (I got this term from Christina Wodtke in her book Radical Focus). They fall into the category of necessary but not sufficient. It’s important not to confuse them with actual progress.
A Lesson From Sports
Professional sports is interesting in that there are so many different metrics (called stats). Some are trivial, some are important, but only one matters – the final score. But there’s a lesson we can learn from all those other measurements.
What Can You Control?
The problem you run into when you measure things is that some things you can control and some you can’t. To take a baseball example, pitchers can control where they throw the ball, and how fast. They can’t control how the batter responds. In business, let’s look at your marketing. You can control what platforms you use, and what messages you send. But you can’t control how the customer reacts.
Here’s how to put this into practice.
First separate your progress metrics (or milestones) from your health metrics. You measure them in different ways and do different things with what you find.
Second, understand the difference between things you can control and what you can’t. If you are doing well with what you can control, but still not getting the results you want, then it’s time to test. A/B testing for marketing as an example. QA testing for production.
Third, make sure that each metric has an acceptable range associated with it. When you design the metric, define that range, and have some idea of what you’ll do if it’s out of range. If your progress metrics are not where they need to be, check your health metrics, and fix any that are out of range. Then look to the things you can’t control and see if you need to test what you’re doing with a new way of doing it.
If you found this useful, here’s where you can find more like this.
My book Output Thinking
1-1 Coaching – I only work with a few clients at a time but anyone can sign up for a free session.
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