Companies that deliver high-quality service, have good customer satisfaction, customer retention and low staff churn are probably using good metrics to measure their performance.
Using good metrics keeps management informed about their business and creates a good knowledge base to assist in the management and development of the company.
Why are Metrics Required:
If you want to drive improvements in your business then the setting of good metrics is essential. In doing so there is a large range to chose from including mandatory ones for safety, contractual and legal purposes to ones that track productivity, customer satisfaction, increase in profitability, and savings. Metrics should be set taking into account the various strategies that have been set which will include marketing, customer requirements, finance, and any standards that may also have been set.
Basically, they will tell the business:
What are the benefits of metrics?
To get the maximum benefit from metrics they should be kept simple so all interested parties have a clear view of what is required. For instance, instead of stating that we want to increase our customer numbers by 20%, we should state that we want to increase our customers by 10 a month. By using simple measurements staff can instantly see what is required.
Well, thought out metrics will:
Implementation of good metrics
When setting metrics they must be clearly defined so the business can measure its success. They must also be achievable as if they are not staff morale will suffer as everyone will be aware that they will not make the target.
The involvement of senior management and other stakeholders in setting the metrics is critical. This is particularly important where there is to be a cultural change as it must be led from the top and be supported by senior management. The old saying that a fish rots from the head down applies in this sense. Communication with all staff is also essential so staff feels involved in the process and will, therefore, take ownership. Lastly linking incentive payments to metrics endorses their priority.
Analyse what data is required to monitor the metrics set. There is no point in setting a metric that is not supported by appropriate data. Metrics must also be reliable to the extent that no matter who calculates the metric the answer will be the same. Finally, metrics must display the businesses’ true position good or bad as they are used to improve the business.
Keep the number of metrics to an easily manageable number and share the results with all staff. Also, encourage inter-company communication to see how colleagues are performing against their particular set of metrics.
Finally, always rely on the continual improvement model as metrics will need to be revised from time to time as the business evolves and where there is external influence such as changes in legislation that may impact the business.