What is measured is done!

There are countless variables and factors that affect your ability to achieve your goals. Decoding this complexity to determine what should be measured is critical to driving improvement and change.

As with many aspects of your business, there can be literally dozens of different metrics. The same is true in sports. So when you’re trying to achieve breakthrough results in your business or win in the field, how do you determine what to measure?

Outcome metrics and contributing factor metrics

In sports, there are usually many different statistics that are tracked and measured. Statistics measure the performance of individuals and teams in every imaginable way and under all imaginable circumstances. But the only stat that really matters is whether the team wins. The number of goals scored is also rather irrelevant; The team can still win with a low score.

And you might have a great player on your team with a fantastic individual performance in their own stats. But if the team doesn’t win, you still don’t reach your true goal.

The difference here is that the number of victories in sports, for example, is the actually desired end result. This is the ultimate goal and this is that result metric. Every other metric is subordinate to the Results metric.

Separately there Metrics for contributing factors. Examples of this are the statistics of the individual team members. These are metrics that you need to track because they are key variables that affect your ability to meet your outcome metric goals. While target achievement on the contributing factor metric is important, it is not the actual outcome you are aiming for.

However, if you have excellent performance in your Contributing Factor metrics, it theoretically increases your chances of achieving a higher number of team wins and hitting your results metric.

Likewise, the most important thing in business is to differentiate the metrics you will be tracking. Especially if you run a business and strive for breakthrough improvements. You need to know and communicate what is being measured and whether it represents the true bottom line you are trying to achieve, and what metrics represent the variables or contributing factors that need to be addressed to enable the bottom line to be achieved.

There should be relatively few result metrics. Meeting or exceeding results metric goals is ALL that matters when all is said and done. You could be hitting targets for many contributing factor metrics but completely missing your outcome metric targets. Even though great work has been done, you still haven’t reached your main results.

For example, you may have a goal to improve employee morale as measured through a survey mechanism. Employee morale is your results metric. Below that, there can be many different metrics for contributing factors, such as:

Much work can be put into improving these contributing factor metrics, which is necessary and important. But at the end of the day, the success of all of these initiatives combined is measured against the single outcome metric of overall employee morale.

This applies to every part of your business and every area you want to improve. Oftentimes, people can do a great job of meeting Contributing Factor metrics goals, but when the organization falls short on outcome metrics, all that great work is overshadowed by the lack.

A single goal is your results metric!

As discussed in previous blog posts, a key factor in achieving breakthrough results is ensuring you have a “single goal” that is widely recognized. This is the result metric!

Otherwise, you’ll find that your efforts get diluted and your results fall far short of expectations when you tell people you want to drive improvements on dozens of metrics, all of which are equally important. There will be confusion. Some contributing factor metric targets are met and others are missed. Everyone will think that he still did his best. And you’ll miss your overall score metric completely.

It’s also important to distinguish that the outcome metrics in one area may be the contributing factor metrics in another area. For example, if you have a company with multiple facilities, you have company-level profit targets and profit targets from each facility. A facility’s profit target is the outcome metric from that facility’s perspective.

However, at the enterprise level, the profit target of this institution is a contributing factor metric to the enterprise-wide profit outcome metric. And that company-wide profit is all that matters at the end of the day.

The nuance that is important to understand here is that if you are unable to meet goals on some contributing factors, you still have the flexibility and opportunity to exceed achievement of other contributing factors. In short, you can still achieve your overall result metric goal.

When a facility misses its own profit target, they can turn to other facilities to exceed their own profit targets, still allowing for the company’s profit outcome metric to be met.

If one of your team players is struggling with their performance, you still have the rest of the team to make up for it. And you can still win and reach your overall team goal.

What is done is measured

Both outcome metrics and contributing factor metrics are important. One enables the attainment of the other. But only your overall score metric matters.

Shareholders will primarily look to overall performance results to see if a company has achieved its goals. You will surely also look at the performance of different lines of business or regions or channels. And this will inform areas for discussion and further improvements. But in all cases, the intent is to improve the results metric for the ENTIRE organization.

I have seen many cases where managers have been confused about what is being measured and what is important. They honestly try to drive improvement, but they fail to distinguish between the true bottom line metric and the contributing factor metric. As a result, they are unable to achieve the full potential for change that they wish to drive.

And having a results metric can be a rallying point for your employees. They, too, can be confused by the dozens of metrics flashing before their eyes every day. But if you can communicate and align the organization around a single goal, a single outcome metric, then you can engage people in your goal and increase your chances of achieving truly breakthrough results!

Originally published June 1, 2017.

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