Figuring out how to measure success is easy in some jobs and very difficult in others. Here’s how to choose your performance indicators.
Today we’re going to talk about how to choose what to measure to set yourself up for success.
Grandma Cuddles Daycare is in an uproar! Grandma recently started yoga classes. She's so happy with her newfound ability to touch her knees that she’s decided to travel to India to study directly with the Dalai Lama. The staff tried to explain to her that the Dalai Lama isn’t a yoga instructor. But she insisted, and what Cuddles wants, Cuddles gets.
Chip, the controller, will be taking over in her absence. When Grandma’s around, she rules the center with an iron fist. But she’s taking the fist with her (assuming she can get it through the metal detector at the airport), so Chip needs to find other ways to keep things running.
The old adage is “What gets measured, gets managed.” Chip intends to manage everything as best he can. That means setting measurements. But what to measure, and what to do with the measures, he’s less clear on.
Manage obvious outcomes
Some jobs have natural numeric measurements. Salespeople, for example, can measure how many new prospects they reach out to, their close rate is, the average sale size, and so on.
The Cuddles sales team scours hospital birth records to find prospects for the daycare center. They’re ruthless when it comes to recruitment. A couple of years later, early-stage parenthood has taken a toll on the parents, and daycare suddenly becomes a necessity. That’s when the sales team swoops in like vultures to capture the sale.
Monitor levels and changes
Chip could choose to measure the number of new births entered into the system each day. Or how many of this year’s candidates actually sign up for daycare (that would be the sales yield).
Instead of just the numbers, Chip could also monitor the change in the numbers. Is the birth rate going up or down relative to last year? How about the close rate?
Monitor second-order effects
Chip ponders the Grandma Cuddles maintenance person, who keeps the arc welder in tip-top condition. Everyone knows the arc welder is crucial to the daycare center’s metal shop, and the metal shop is where the kiddies learn the useful skills that will make them valued cogs in the military-industrial machine. Who can put a number on such a noble calling? (Aside from the Grandma Cuddles sales department, that is.)
We can. When you have a mystery job or an activity that doesn’t have an obvious number involved—like maintenance, or status meetings (I just love status meetings)—think of how it fits into the bigger picture.
What parts of the business are affected by the Mystery Activity, and how? The maintenance person keeps the arc welder running. If the arc welder goes down, the kiddies have to substitute nap time for fabrication time. And when there’s no fabrication time, there’s no fabrication revenue. That makes the maintenance person a potential bottleneck for the entire business!
Some measurements Chip can choose include downtime, uptime, speed of repairs, and so on.
Even “soft” activities can be measured
“But wait!” I hear you cry. “Some things are just too far removed from results. Like status meetings.”
Are they? Most status meetings fit in three ways: team bonding (hah!), giving everyone a shared team context, and spotting opportunities for coordination. If you know these are why you’re meeting, you can measure them. Team bonding can be measured through surveys. Or just watching the team interact. You can ask people at the water cooler how they think things are going and listen for shared context. And you can note how often status meetings result in team members finding ways to help each other—coordination.
Use measurements to improve
Once Chip is measuring, it’s time to start managing. Compare the numbers against what you know is possible. When something doesn’t measure up, it’s a chance to improve things.
The arc welder is offline 37 days out of the year due to a recurring weak joint. Is that a reasonable number? One call to the manufacturer reveals that the expected downtime is only 2 days a year. In a masterpiece of irony, the arc welder is down … due to a weld that keeps breaking.
When something doesn’t measure up, it’s a chance to improve things.
The solution is sending the repairperson to a refresher course on fixing arc welders by welding the weak welder weld. Pretty soon, 37 extra days of revenue are pouring into Granda’s coffers like the blood of young people desperate for cash into Silicon Valley venture capitalist Peter Thiel’s veins.
Use measurements to coordinate
Measurements shared at status meetings help the team find and solve problems. When Claire, the landscape architect, hears the sales team report declining birthrates, she quickly replants the northwest quadrant of the hedge maze so the roots will eat into the local power lines. The resulting blackout lasts three days and two nights. Nine months later, a new batch of Grandma Cuddles kiddies are born.
Measurement also leads to coordination. When the facilities team hears Claire’s plan, they realize it gives them 11 months to prepare for the admissions spike. They can start planning for new uniforms, work stations, and equipment sooner rather than later.
Measurement makes everything better! As long as you measure the right things. You can measure direct output numbers, changes in numbers, or the effects that something has on other parts of the organization. Use the measurements to find and fix problems, and to coordinate.
Under Chip’s oh-so-watchful eyes, I think Grandma Cuddles is going to take off.
Announcing an impending farewell
They say that all good things must come to an end, and my time as QDT's Get-it-Done Guy has been a very good thing indeed. What started as a tiny creative outlet turned into 12 years, 570 episodes, a book, millions of downloads, and a great circle of colleagues, fans, and friends. At the start of the new year, I will be moving on to new adventures. On January 7, 2020, you'll hear my last episode as Get-It-Done Guy. I'll also introduce you to my successor, who isn't a "guy" at all! She's Rachel Cooke, a leadership expert I know you'll learn a lot from.
I'm excited for you to meet her. Meanwhile, thank you for taking this strange and wonderful journey with me, and stay tuned for my final episodes.
Work Less, Do More, and have a Great Life!