I have seen my share of good and bad metrics. And I continue to get it wrong. Then I learn and try again. Below are some of the guidelines I am using for developing useful metrics.
TIE METRICS TO BUSINESS GOALS – seems obvious but a metric tells you something, and if that something cannot be tied directly to a business goal, why are you using it?
GET ALIGNED ON THE GOALS BEFORE YOU START – it’s amazing how two people can look at the same goal and interpret it in completely different ways. Make the effort.
BALANCED VIEW – weight your metrics so that you avoid over-rotating on any one or small set of measures. A balanced view of metrics provides a holistic picture.
ORTHOGONAL METRICS – rather than use one complicated metric, develop two or three simpler ones that provide a faceted view of what you are trying to measure. The goal here is to avoid metric gaming and having a few metrics that look at a goal from different points of view. The benefit is simplicity without being simplistic. Measuring a complex system requires different views and synthesis to deliver the big picture.
THE NAPKIN TEST – if you can’t write your metric calculation on a napkin and explain it in less than a minute, it is too complicated. Continue reading →