By Ed King
In our busy lives, it’s just a little too easy to confuse activity with progress. We’re all guilty of it sometimes. For my fellow analysts and strategists out there, this problem can look like spending hours crafting an approach, building surveys, setting up measurement systems, gathering data or designing dashboards to display data in a “visually appealing” way. I could go on.
Thanks to technology, we have access to copious amounts of quality data. In a few taps of a mouse, we can compare the click-through rates of two images allowing us to determine, for instance, that a red background performs 0.26% better than a blue background. Or a survey may uncover that employees who are hired in January have two months longer tenure than those hired in December.
Fascinating? Sure. Useful? Somewhat. Needle-moving? Hardly.
There is a lot to measure, and the data we uncover can help improve how we spend our budget, how we hire and onboard employees and much more. However, it’s important not to lose sight of the big picture in this monsoon of data. Is it important to measure the small stuff? Absolutely. But don’t simply assemble all that small stuff in a pretty package and call it real, needle-moving progress. It’s not.
Use that small stuff to lead you to the big, important insights that will transform your company.
When starting any kind of measurement, no matter how small, keep the true measures of company progress – key performance indicators (KPIs) – top of mind to gauge what is truly moving the needle. For instance, if you are measuring something seemingly small, like how many hours employees dedicate to innovation each month, follow the ripple effects of that measurement to understand how it relates to something more substantial.
Whatever you are measuring should be in the pursuit of one or more of the following business KPIs:
- Sales (Does what you’re measuring help increase sales?)
- Margin (Does what you’re measuring lead to more profits?)
- Sales velocity (Does what you’re measuring accelerate the rate of sales?)
- Marketshare (Does what you’re measuring convert and retain more loyal customers?)
- Voluntary turnover (Does what you’re measuring help retain employees?)
- Net promoter score (Does what you’re measuring lead to a better customer experience?)
In our example with number of hours dedicated to innovation, the path would look something like this:
- By increasing the amount of hours dedicated to innovation from 10 per month per employee to 20 per month per employee …
- … we can increase the amount of viable innovative ideas per month from two to three …
- … which means our annual new product releases will increase by one …
- … which means we project increasing top-line sales by 3.5% and margins by 1.6%.
When your measures are tied to key company KPIs, you elevate the task of data collection, analytics and insights as a critical part of building a better business. Looking for a team to help move the needle with KPI-driven measurement? We’d love to talk with you about how we can help. Contact us today.