CEO Confidential

Why we should never ask the question “so, what should we measure?”

Best Idea

Brainstorming is probably the most common approach people take to decide what to measure in their business. They gather around the whiteboard and list ideas in response to the question “So, what should we measure?” It can feel like the easy way out of an activity many people dread. And it does have a few up sides:

  1. Lots of ideas for measures can be generated.
  2. The measure ideas are collaborative.
  3. Everyone knows how to do it.
  4. Lots of people can be engaged in the measure selection process.
  5. All ideas are considered, which helps people willingly participate.

But, quality in equals quality out. Brainstorming is not a measure design technique. A process that was designed for creativity and not measure design will not produce useful and usable measures. Inevitably, the resulting list of measures misses the mark:

  1. Too many measures are produced, and the short-listing is based on data availability, rather what’s important to know.
  2. The same old measures come up, rather than new and better ones.
  3. People are brainstorming with different understandings of what the goal or objective means.
  4. Unintended consequences aren’t considered.
  5. Many ideas are not quantifiable measures, but actions, milestones, data, or vague concepts.
  6. What is brainstormed is often expressed so vaguely no one can remember what it meant later on.

Meaningful performance measures have very specific qualities that brainstorming cannot ensure. It’s a bad KPI habit that somehow became common practice. Following Einstein’s definition of insanity, better performance measures won’t come by doing what we’ve always done. This bad KPI habit has to stop, and in its place we need a measure design technique that truly works.

Four steps to better measures.

When our goals are written clearly (without weasel words like efficient, effective, productive, quality and sustainable), we don’t need to brainstorm measures. Better measures are simply quantifications of how much evidence we see, hear, touch, or detect in some way, that convinces us the goal is happening. It works like this:

  1. Start with the goal or objective or result you want to achieve (and measure). Stay focused on this particular result while you are designing measures for it and don’t let your attention wander to other results. For example: “our customers are loyal”.
  2. Describe this result in a lot more detail, explaining what you and others would see, hear, feel, be doing (or even taste and smell!) if that result were happening now. Explain the evidence you would notice or observe in the real world. Measures can only quantify what is observable. For example: customers recommend us to others, customers keep coming back to buy, customers buy more.
  3. List the potential things you could count or average or take a percentage of that would give you evidence of how much each of those pieces of evidence was actually occurring. For example, the percentage of customers who recommend us, the average number of times customers buy from us, the average value of each customer order.
  4. Choose the best measures by evaluating each one on how strongly it convinces you of the goal being achieved, and also how feasible it is to implement.
  5. Express the chosen measure clearly, with a concise and unique name, and a description that makes it very obvious what is being quantified and how. For example: Customer Buying Frequency = the average number of times customers buy from us each quarter.

You no longer need to brainstorm performance measures. In a few simple steps, you can design useful and usable measures, and deepen everyone’s understanding of the results that matter most in your business.


Have you read?

7 ways to transform your leadership
5 habits you should steal from remarkably successful leaders
Why Financial Services Companies’ Databases Need Continuous Monitoring and Proper Data Stewardship
The Most Important Skill You Need as an Effective Leader

Written by: Stacey Barr, performance measurement & KPI specialist.

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Stacey Barr
Stacey Barr is one of the world’s leading specialists in business performance measurement and KPIs. She is known for her practicality in solving the most common struggles with measuring what matters. Her book ‘Practical Performance Measurement: Using the PuMP Blueprint for Fast, Easy, and Engaging KPIs’ is available at all amazon online stores.
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