Metrics are a critical element of the plan-as-you-go business plan. The planning process requires pulling people into the regular review schedule and helping them care about performance and results. For that, you need to develop metrics.
Recently I listened to an HBR Ideacast interview with Patrick Lencioni, author of The Three Signs of a Miserable Job. Here’s a quote from that podcast:
All human beings in any kind of a job need some way to assess their own performance that’s objective. It might not be numerical or easily quantitative, but it’s somewhat objective and observable by them, because then they are not left to depend upon the opinion or the whim of a manager once a year during a performance appraisal. People need to be able to go home from work every night, or every week, or every month, and know where they stand, and know what they can do to influence how they’re working. This is why sales people are generally very satisfied in their job, because they have very clear evidence of their performance. Most people think they are coin operated, but in fact a quota is a wonderful scoreboard for them evaluating themselves, and all people need that.
Sometimes it requires a manager to be very creative in how they come up with that. In my book this one guy works at the drive-through window in a fast-food restaurant and the manager helps him realize that the best way he can measure the impact of his success is to find how many times he can make somebody smile or laugh that comes through his line. So he writes down or records for himself how often he can do that.
We have to give people that sense that they have some measure of control.
This is about metrics. Find ways to help people track progress towards goals. Build numbers into your plan so people can see their own progress, and peers can see each other’s progress. 
The most obvious metrics are in the financial reports: sales, cost of sales, expenses, and so on.
As you build your planning process, look for metrics throughout the business, aside from what shows up in the financial reports. It’s different for every business, and every function in the business. For example:
- What about measuring sales beyond the sales numbers? How about what leads to sales, such as leads, or presentations, or proposals?
- You can measure calls taken, minutes per call.
- Some companies set an objective poll or survey, maybe even something as simple as what you can do at www.surveymonkey.com to measure intangibles like customer satisfaction.
- A software company might measure product quality by tracking support incidents, or incidents by type. It might also measure the effectiveness of support providers by measuring minutes per call, or calls per incident, or by taking a survey of customers after their service transaction is finished.
I find that in general, developing the metrics required to bring your people into the planning process is very important. Get the people involved in how they are going to be measured. Often the team leaders fail to realize how well the players on the team know their specific functions, and how they should be measured.
If you like trendy terms, the buzzword these days is scorecard. Business analysts use scorecard techniques to measure and track performance beyond the simple financial reports.
Tim Berry is the founder and chairman of Palo Alto Software and Bplans.com. Follow him on Twitter @Timberry.
