Knowing What to Measure – Selecting the Metrics that Matter

We have been targeting metrics that matter recently both in our blog and at PGS as an organization.  Last week, we spent three hours reviewing and improving our own internal Instrument Panel.  Out of that process, we are bringing you some keys on knowing what to measure within your own organization.

How many measures?

To set the stage, how many measures should you have? The answer? Well, it varies. Ideally, each individual or level within a department/organization should have no more than 3-5 key measures that scale up and down into each other.  For example the Marketing Department as a whole may have upwards of 15 measures, depending on its size, made up of each individual or area’s essential 3-5 measures. The Marketing Director might keep track of qualified leads passed on to sales and overall marketing expenses.  Meanwhile, the website developer would track bounce rate, hits to the site, and number of leads generated.  Over in newsletters, the staff would track open rates and click thru’s on the links provided. And so on. So, each individual or section of a department should have a set of 3-5 essential metrics, that feed up into the metrics that the department head tracks.

We are trying this out on our own Instrument Panel at PGS.  Over the years, we have had in a place one Instrument Panel, with about 12 key measures from throughout the organization. However, since we are growing and desiring to develop a more metric focused culture, we took our existing IP and broke it up. We narrowed down the 4 key measures the CEO needs in order to know the organization is moving in the right direction. Next we will begin to parcel out the remaining essential measures to the division heads who have authority and control over them. Those measures can influence that individual’s work, and eventually feed into the top level measures that we kept on our Instrument Panel.  Though no measures were lost, they were divided up and will be tracked and monitored at the division level.

What measures should you track?

So if you are only selecting 3-5 metrics, how do you know what they should be?  There are a couple key questions to ask in order to find the right measures for your unique responsibilities.  First, how do you know your work is adding value to the organization, or better, the customer? In other words, what is your objective in the work you do and how do you know you are achieving it?  Set up a measure(s) and track the answer to that question.

Another question you can ask to determine your key metrics: How do you deliver the results expected of your area of work? What is that process?  At PGS, we call those your core processes, i.e., the processes that set you apart from the competition, that deliver the needed and wanted results to your customer, whether external or internal. How do you know that your process is effective and achieving desired results? Set up a measure and track the answer to that question.

One last note on knowing what to measure, make sure as you are selecting your metrics that you are measuring what is in your control. There are a lot of fascinating measures out there, but you want to develop a measure that will allow you to make better decisions or improve the processes you work in based on the data you are gathering.