The Quest For The Holy Grail: The 5 Best Metrics For Your Team (Part 2)

By Israel Lang, Executive Consultant, HTG Peer Groups

I was asked this month to provide you with the 5 Best Metrics for Service Delivery Management. In my last post I wrote about the fact that my own search for the holy grail of metrics has served fruitless. I proposed that many of you, like me, have at times suffered from “Metric Envy” (measuring the same metrics as someone you deem successful) or “Metric Overload” (measuring too many things and managing none). 

There is hope for finding the five best metrics for your team. Notice I added “for your team” at the end.  In this post, let me lay out the process and principles I used when I was a service executive and what I teach the companies I consult with about determining what should be measured and managed. 

Here is my process in a nutshell: determine what your goal or objective is, define what success looks like, and establish the lead measures that will help you achieve your lag measures.

Determine What You Are Trying To Accomplish In 3 Key Areas: Employees, Customers, And Finance

In my opinion, there are three general areas that all metrics should be focused: employees, customers, and finance.  In some cases you’ll want a couple in each area. In other seasons of business you may need to be laser focused on only one of the three.

If you can’t tell me how what you are measuring influences or helps predict something in one of these three areas, you probably shouldn’t be measuring it.

All functional areas (sales, service, operations, and finance) have a stake in the three areas mentioned above. As the person in charge of service, you should be only choosing metrics that you can influence. I often see individuals measuring something out of their domain and it, at best, distracts them and, at worst, confuses them.

Select 3 To 5 Metrics That Best Align With Your Organizational Goals

Simply put, you must determine what the five or three (probably better) or seven (I wouldn’t go more than 10) best metrics for you to help in managing your team’s performance as well as your own.

Metrics should be a tool used to help answer or predict a question that is part of a larger story. They shouldn’t be something you are doing so you feel managerial.

They will also probably change two or three times a year as the organizational goals change.

We have to answer the “So what?” question.  Here are some more specific questions that might help you drill down to determine the why of a particular metric.

• What business goal or objective are you trying to achieve?
• What problem are you trying to solve?
• What risk are you trying to avoid?
• What opportunity are you trying to leverage?
• What behavior or cultural norm are you trying to change?
• What process or other change are you trying to install?
• What are you trying to grow?
• What are the initiatives, goals, or projects are you in charge of?

Often the answers to these questions come out of a strategic or business planning session. (You have those from time to time, right?) Or they may simply arise out of an area that you know is holding your team back from optimal performance.

Identify What Success Looks Like In That Particular Area

Along with spending time envisioning success for each area, determine which activities can influence and predict the outcome you want. Those types of metrics are typically called lead measures. The other type of metric you may have heard tossed around is lag measures.

The best way to explain the difference in terms is to talk about weight loss. When you are trying to lose weight, each time you get on the scale you get a lag measure. You get the report of how well you ate and exercised the day, week or month since you last weighed yourself. The lead measures are those things that can influence and help predict the success or failure of your lag measure. In the case of weight loss those lead measures are number of times I exercised and how many calories I consumed in the last week. So if my goal is to lose 10 pounds over three months, I should probably exercise three to five times a week and keep my calories between 2500 and 3000 a day. If I track those lead measures, exercise and calories, I can probably predict the lag measure or what the scale will say to me when I get on it in three months.

Over-Communicate Clarity And Train Your Team

Help your team understand what you are measuring, why it is important, how it impacts them and your customers, and what role they play in achieving the desired result.

Be sure to revisit your metrics often with your team so that they understand why they matter and so that metrics become part of your daily conversation as you use them to assess performance and make decisions.

Revisit this exercise frequently because what you are measuring today, this quarter, or this year may not be what you need to measure tomorrow.

Generally I think we make our quest for the holy grail of best metrics much harder than what it should be. In my opinion, there are some fundamental metrics you should be measuring such as profitability and service gross margin, etc. Those are all lag measures that simply demonstrate your performance over a given period. Those are important for a manager to know.

However, the most important metrics for you to focus on are the lead measures that you are able to individually influence and which give you the predictive data you need to get the results you, your team, and your organization want. These are somewhat subjective based on your company’s unique trouble spots and organizational goals. These lead measures will help you achieve your desired lag measures of strong, consistent, and profitable performance.

Refusing to fall into the temptation of suffering from either Metric Envy or Metric Overload and instead investing the thought time into developing customized metrics that align with your goals and give you the indicators you need to drive toward organizational health will pay dividends many times over.

Stop on over to HTG Peer Group’s Expedition Leadership blog and see some examples of this process in action.  I would love to get your feedback or perspective so comment below, e-mail me, or start a conversation on Twitter.

Israel Lang is part of a team of coaches and consultants serving the IT industry. Prior to joining the HTG Peer Groups staff, he spent almost 20 years in various roles in service and operations at a solutions and managed service provider.  Israel’s company was a member of HTG for many years, and he is a strong proponent of the peer group experience.  He loves helping companies go further faster through developing executives, managers, and teams into effective leaders who reach their fullest potentials. You can reach him at ilang@htgpeergroups.com or on Twitter @israellang.