In today’s digital world, we produce an astounding amount of data. One easy to remember, yet mind-blowing figure from Forbes.com is that 90 per cent of the data in the world was generated in the last two years alone . The production of such vast amounts of data clearly has important privacy and security implications. But it also opens a whole new dimension when it comes to setting, reviewing and utilizing metrics.
Measuring performance is commonplace in business, whether that be the work of an individual employee, the success of a business unit, or the performance of an entire company. Performance measurement is so routine, that I would argue we have come to take it for granted. It is very rare that we would ask ourselves “why do metrics matter?”
Metrics are vital to the success of your business because they ensure accountability, improvement, and engagement. This is even more critical when operating across organizations within a partner ecosystem, working with others towards shared objectives. Within such ecosystems, having the technological tools to enable a certain depth of insight into performance is crucial.
Metrics should be closely aligned to your business priorities. They should be quantifiable; you should be able to measure them accurately and use them to benchmark performance. With clearly defined metrics, every individual in an organization should be clear on their role and their deliverables. Metrics create transparency and therefore accountability. When individuals feel accountable for their own contribution to an organization, they are likely to take more ownership and perform better.
Of course, you need the right tools to support this, ideally with automated systems in place that provide greater line of sight in tracking and measuring performance both within and across organizations. Thankfully, we already have the technology at our fingertips to facilitate this.
Accountability links very closely with improvement. If you can define the right metrics for your organization, or for the partners in your ecosystem, you can build them into a continuous cycle of review and improvement, to move your business forward and encourage continuous growth. See this interesting article by McKinsey for an in-depth analysis. Data continuously flows into decision-making: data from the right metrics are invaluable to make this a meaningful process. Get those metrics wrong, and the decision-making process can be stunted or even starkly damaged.
A virtuous cycle of improvement can be created on a personal performance level too – but you need to know where you are starting from, to see incremental improvement and visualize the path to the finishing line.
A virtuous cycle of data, review and improvement can be a powerful engagement tool. If we know where an employee or a partner is particularly strong, we can use that information to share best practice or to try techniques that have been successful in one area in another area. This facilitates cross-functional and cross-organizational collaboration. In the field of training, in-depth reporting can be used to see which teams or departments have consumed which training. Which topics were most popular? Which trainings were the least successful? How long did employees spend on their training? These insights can be used to improve the training offer and to increase engagement in the future.
“What’s measured improves”
Peter Drucker, Austrian-born American management consultant, educator, and author.
A wealth of data is at our fingertips. The analytical tools are available and can be implemented in a refreshingly simply way. We just need to know what we want to measure, what the metrics look like, and how this is relevant to our business priorities, within an organization or across organizations in an ecosystem. When this information is built into a continuous cycle of review and improvement, the impact can be a game changer.