What are metrics and why are they important?
In this series of 19 short articles, StratPad’s founder discusses the fundamentals of starting and running a small business.
Today he talks about metrics and what they mean to your business:
Q: What exactly is a metric? It seems like another one of those “business terms”.
A: Metrics are basically just any value that helps you measure progress. You attach a number to a goal that you’d like to achieve in order to keep yourself and your team accountable.
Metrics are a really, really important and powerful way of linking every individual in your company to the overall company’s goals. They’re also challenging because a lot of the people in your company aren’t necessarily driving financial goals. Your salespeople, for example, they’re driving financial goals and so their metrics and their compensation is aligned pretty closely to the financial. But your people who are doing costumer service work, for example, they may not necessarily be involved in driving sales. However, they are involved in driving costumer’s satisfaction so you can measure that, for example, how fast does it take to return a phone call? There are all kinds of other ways of doing it.
That’s where it’s important to include these people in the business planning process; to get them not only understand the goals but then, to get them to help you identify the metrics that they can live with that are aligned with the overall goals of your organization.