Metrics don't have to be complex to be effective. A "metrics driven" approach can be as simple as focusing on a few key, actionable metrics.
With this article, learn about the importance of being a "metrics driven" organization, how to use metrics to influence behavior, the keys to creating a company culture that values metrics, and why it's important to not take your metrics too seriously.
Here are our 5 Key Takeaways:
1. Metrics should be used to drive action and influence behavior.
2. Foster a company culture that values metrics and rewards those who use them effectively.
3. Keep metrics simple, actionable, and influenceable.
4. Focus on a few key metrics that are "high-five worthy" and celebrate when they move in the right direction.
5. Don't take your metrics too seriously and have fun with them!
It’s easy to feel like everyone has these incredibly complex, insightful metrics about their business while you are the only one who wouldn’t know a p-value if it punched you in the face. Metrics Driven Organization Is Blue Canvas a “metrics driven organization”?
For a long time, I was bashful about making that kind of assertion. Sure there are some numbers we keep track of, but we’re not using anything as fancy as Mixpanel, let alone R. We haven’t instrumented every inch of our product and we haven’t yet run a single A/B test.
So we can’t be metrics driven, right?
“Metrics” have become so trendy that people are now misquoting W. Edwards Deming. Deming famously said “if you can’t measure it, you can’t manage it.” He did say that. But in full context of what he said it was:
“It is wrong to suppose that if you can’t measure it, you can’t manage it – a costly myth.”
That’s an awful lot of meaning that gets missed when you chop off the front and back of the quote as so many do.
Every company I’ve worked for and interviewed with touts their analytical bona fides.
There is an “emperor has no clothes” aspect to all this. It’s easy to feel like everyone has these incredibly complex, insightful metrics about their business while you are the only one who wouldn’t know a p-value if it punched you in the face.
But recently, we at Blue Canvas had an “aha” moment that gave us a different perspective on the metrics driven approach. We wanted to share it, in the hopes of simplifying the idea of what it means to be a “metrics driven” organization and to show how powerful metrics can be if you don’t take them too seriously.
Using Metrics to Influence Behavior A few weeks ago, I had scheduled a call with a potential customer. He was a Salesforce developer interested in source control with Git. I was in Europe and the call was going to be inconveniently late at night. Beers with Alex and his wife beckoned so I opened my email to reschedule the call for when I was back in San Francisco.
If your metrics aren’t influencing decisions and behavior, what are they for? But then I remembered we had our Friday review meeting the next morning. During the meeting we’d be reviewing our five key metrics, one of which included Pipeline. I decided to take the call because it would feel so much better to be able to say to Alex: “Pipeline grew by 17%” rather than “Pipeline grew by 8%.” Because I had this metric in mind, I ended up doing the right thing and having a really great call with the prospect.
There are a few keys to why this simple “metrics driven” approach was effective:
Company Culture Because Alex and I sit down every Friday morning to look at our five key metrics, there is peer pressure to do things that drive metrics and skip things that don’t.
It’s important to foster a culture in which metrics are used to drive action. People should be encouraged to tell stories of where they used their key metrics to make a decision or to do something that they might not otherwise have done. If your metrics aren’t influencing decisions and behavior, what are they for?
People should be rewarded and praised when they do this. Call them out publicly.
Simple Tell stories which demystify metrics. Show how the simplest metrics can be most effective in changing behavior.
Pipeline is about as scientific as The Starry Night (it’s an approximation of potential opportunities in a given quarter). You don’t need to be a statistician to use pipeline as a metric, but it influences our planning every week.
Actionable The metrics that we track are highly influenceable by our team. They are numbers that, if we work hard, we know we can drive and change.
Precisely which metrics are actionable will depend on your role and your business.
Because metrics are numbers people take them very seriously! But you really shouldn’t. Odds are your metrics aren’t as good as you think. If after a few weeks we’re not seeing a metric trend the way we want it to, we can stop and think about alternative strategies which might influence the metric more. We can ask whether there is a smaller, more influenceable metric that would be more useful. And we can even question whether a metric has outlived its usefulness altogether.
Explicitly trying to keep metrics influenceable keeps every conversation around metrics is centered around actions.
Not Too Many The perception that more is better is one of the biggest problems with the metrics cult. More data is not necessarily helpful. If you’re using your metrics to influence action, too much data ends up being very noisy.
It’s better to just pick a couple of metrics that you want to be thinking about all the time. Good examples are: revenue, users, usage, pipeline, email addresses of prospects, user stories completed and created, etc..
At Blue Canvas, we focus on five and talk about them every week. If we did more than that, we probably wouldn’t have been focused enough on them to associate doing a late night call with driving a key metric.
“High-Five Worthy” Metrics Your metrics should be something you are going to high-five about when they are moving in the right direction. They shouldn’t be boring. Revenue is something to high five about. So are new conversations with prospective customers or new leads to email. For me, dropping the Bounce Rate on our blog doesn’t quite cut it, but new beta signups does.
Metrics should be simple, easy to to measure tools for creating focus. As a new company focused on Continuous Delivery and source control for Salesforce developers, we have our own set of metrics that excite us. Every personality and business will have different metrics that matter to them.
Don’t Take Your Metrics Seriously Because metrics are numbers people take them very seriously! But you really shouldn’t. Odds are your metrics aren’t as good as you think.
At a previous company where Alex worked, they ran some “A/A” tests to see if their A/B tests were actually telling them anything real. It was set up like a real test, except they used the same exact content for both variations. They found that one of the variations vastly outperformed the other. But of course it was the same exact same content!
Most of us are not lucky enough to have enough traffic to our sites to really make this kind of testing statistically valid. And that’s okay! For most businesses (of course not all) metrics should be simple, easy to to measure tools for creating focus.
Because I was so intimidated by all the noise around metrics, I almost gave them up as a useful tool. Don’t be like me. Embrace metrics to drive behavior and have some fun with them! They aren’t as intimidating as they are made to seem.
