Are you sick of hearing ‘you get what you measure’ yet? It’s one of those crusty old sayings that we (and by ‘we’, I mean ‘I’) really want not to be true, because it would be so awesome if businesses would just thrive without going to all the hassle of recording, collecting, and reviewing all that data. As a business owner or senior leader, there’s also sometimes a fear that you’ll seem too ‘Big Brother’-ish or focused on profit and not people by measuring performance. We (many of us) want to be the kind of leaders that inspire others to greatness, innovation, and dedication, without having to resort to what can feel like petty meanness such as charts, dashboards, and the like. Right?
As I’ve mentioned, my professional background started with extensive training and application of Organizational Behavior Management (OBM), which is all about defining and measuring the behaviors that lead to success. If you’re looking for inspirational leadership, transformation, motivation, you will not find it in this applied science. The problem is that it works. Frankly, after about five years (two years longer than my mentor predicted anyone could manage OBM projects without experiencing burnout), I wanted to believe success was possible without all the work of measuring.
The good news (for me at least) is that there IS a place for leadership that can’t be measured. It’s not always easy to teach, but when you can help leaders adopt the mindset that they’re mining for gold, and that there’s gold to be found in everyone, it’s life-changing. When I can help people get – really get – that there’s so much more to true leadership than profits, I feel like I’m doing what I was put here to do. It doesn’t mean that every business needs to become a non-profit. You can love the people you are serving as a leader, and still sometimes need to coach them on their performance and even let them go. This can be a life-affirming or life-destroying process, literally, and when leaders understand this and apply their influence with compassion and kindness the world is a better place.
And we STILL have to measure things! For your business to be able to provide a means of financial provision for yourself and your employees, you need to be profitable. For you to be profitable, you need to know what’s working and what’s not. Even more basically, you need to know how much revenue will be incoming in the short and long term versus your expenses. Most owners know this intuitively when the business is small enough that they’re in it exclusively, but this can get out of hand very quickly
There are a lot of excellent resources to assist you in defining your organizational metrics and dashboards and the best way to depict your measurements. What and how you measure varies greatly in complexity. In OBM, we differentiate between organizational outcome, team or individual accomplishment, and individual behavior. The rule of thumb is you want to measure at as high a level as is sensitive to your tracking and feedback interventions. Unfortunately, top line revenue metrics do very little to change individual performance (but you’ll be hard pressed to find a good argument for not tracking top line revenue).
My simplified approach is to look at the four main areas of your business: getting the work (Sales), doing the work (Ops), getting paid and paying vendors (Accounting and Finance), and legally finding, paying, and providing benefits to staff (and all accompanying employee relations) – (HR). Each of these four areas can be measured on a high level, intermediate, and behavioral level, and what to measure and how will depend on your business and the performance of each. In companies where the operations team is not fulfilling on sales’ promises, you’d measure different things than in areas where there’s not enough orders in the pipeline to pay all the bills.
Most businesses do a pretty good job of measuring where they were, and less good at seeing where they are, which can be fatal. Determining what and how to measure takes skill, time, expertise, and the input of several key leaders in your business. I can’t do it justice in one or two articles, and in fact have created several training webinars and seminars around targeting and tracking alone. However, there are some things you can start doing today that will get you further ahead than you are now. If you’re interested, check out the Leadership Tools section on my site and download the Tracking Cheat Sheet or any of the Targeting Tools for free.
Carrie Maldonado is the founder of Today’s Leadership Solutions, a Seattle-based consulting firm providing comprehensive organizational development solutions for companies who are growing and who truly value their people. With certified Executive Coaches, Organizational Behavior Management (OBM) practitioners, SPHR-certified HR professionals, and Organizational Development Specialists, Carrie’s team brings a unique perspective and a cross-functional approach to providing workplace solutions that work. Carrie can be reached for consultation at email@example.com