Sydney, Australia - 1 Feburary 2022 - Boardroom Ventures (BRV) announces an agreement to acquire the...
Selecting metrics and targets for your business is a personal choice. What might be right for one organisation, or even for one of your teams in particular, might not be right for another. When making this decision, it's important to understand precisely what you are trying to measure and why it's so important for your organisation.
Don't just measure for measuring's sake. Don't simply analyse your business just because everyone else is doing the same thing. Look for evidence that your endeavours are successful. Look for clear indicators of progress and growth. Use meaningful metrics to gain a better insight into your company.
Take a look at these five tactics for selecting meaningful metrics for your business.
Without a clear and precise definition, metrics become useless. A metric should be a means by which your organisation can measure its successes, not an exercise in going through the motions. These successes must apply to the function of your business in the market, in real terms. In other words, successes must be measured by the benefit they bring to the company as a whole.
Using the SMART acronym is a simple way to ensure that your business' metrics stay on track. The SMART criteria are:
There's no place for ambiguity in business, least of all when it comes to the metrics you are using to measure success. Each metric must be either a response to a specific problem or a step towards a specific outcome. Ensuring this will help you to keep your organisation on track.
How can you achieve success if there's no way to measure the metrics you are pursuing? Define clear methods for measurement, and be realistic about what you hope to achieve. This will make it obvious to all parties when the target has been hit.
Setting grand, distant targets is no good for business. Such targets are difficult to hit and only succeed in damaging morale when the organisation falls short. Instead of this, look for realistic, achievable targets in the short term, which grow into bigger milestones as momentum builds in the long term.
There's no point in pursuing targets and metrics which are not directly in line with the needs of your business. Appraise these needs, consider what is required and make sure that your metrics are supporting this.
When do you expect to begin to see changes? When are you aiming to hit your business targets? When will it be time to move on to the next metric for success? A solid business objective will always be time-critical, so make sure you have a set timeframe for its completion.
A target is a set of metrics which must be accomplished within a set time. When you define your targets, and the metrics you'll use to measure your success, make sure that these targets will have a meaningful, positive and obvious impact on your business.
These targets also need to be transparent, which will make it easier to get your whole team on board. Make sure everyone understands how the targets and metrics are chosen, what they can do in their particular role to support the achievement of the goal, and what this goal completion means for the organisation.
Of course, a target for your organisation is a target for everyone involved in that organisation. However, in practice, this is not always how it works. If you utilise only one set of metrics and expect everyone to abide by this, you run the risk of some teams going off track, and of wholesale inefficiency for your organisation.
To avoid this predicament, consider having several objectives running simultaneously, one for each level of your organisation. Targets for individual teams can be based on the completion of day-to-day tasks. For departments, the targets and their accompanying metrics can be more long-term. At an organisation-wide level, the targets may take even longer to complete.
The idea is that these diverse sets of metrics are different enough to be relevant to each particular team, but closely linked enough to work harmoniously together.
Every member of your team should understand what each metric and target is for, and how important it is that objectives are completed. This requires a clearly defined and well-communicated philosophy which can be applied to each of your organisation's targets. With this in place, it becomes much easier to get your entire team behind the pursuit of your objectives.
There is arguably no such thing as the perfect metric or the ideal target. Don't get too hung up on achieving this perfection. Instead, consider how each metric will help your organisation progress and develop once the target is attained.
All metrics should be geared towards bringing about a more positive set of circumstances for your company. Make sure that all your metrics fit this critical criterion.