Jerry Muller

Measurement demands judgement: judgement about whether to measure, what to measure, how to evaluate the significance of what’s been measured, whether rewards and penalties will be attached to the results, and to whom to make the measurements available.

Victoria Bough, Ralph Breuer, Harald Fanderl, Kevin Neher

The heart of effective customer-experience measurement is the organizing principle of measuring experience at the journey level, as opposed to looking only at transactional touchpoints or overall satisfaction. […] A more holistic measurement strategy starts with an integrated measurement model in which all customer-experience metrics along touchpoints and journeys flow up to a top-line metric (Exhibit 1). It matters less which top-line metric a business … [ Read more ]

Thomas P. Joyce Jr.

You can walk up to a visual board on the shop floor in any Danaher business, and the metrics have the same labels: safety, quality, delivery, cost, and inventory. You can look at progress against clear targets — monthly, weekly, and daily cell-level targets. With that kind of visibility and transparency in performance, it’s easy to call it the way you see it. You can … [ Read more ]

Thomas P. Joyce Jr.

[Our] first four core value drivers are core growth, operating margin expansion, working capital returns, and return on invested capital. Those are the four shareholder-facing financial metrics.

The next two are customer-facing metrics. On-time delivery is measured against when the customer wanted us to deliver something (even if that is yesterday). External quality is a broad measure of every dimension of a customer experience.

There are two … [ Read more ]

Shannon Hennessy

Everyone loves to hate on benchmarks, and I can understand where that comes from. There are people who have deep scars from watching benchmarks get misused and from trying to compare one company to another in a way that they aren’t similar.

That said, I have not seen anything be as effective as benchmarks in triggering some hard questions, such as “Why does it take 50 … [ Read more ]

Kevin Chou

If a company is designing KPIs strategically, then every leader on your team has KPIs tied to product, market, growth or revenue. Every quarter, and certainly every year, you should see your leadership team hitting or coming close to their KPIs in those areas. If you start seeing significant misses in one of them, that’s a red flag for the whole company. As a CEO, … [ Read more ]

Lloyd Tabb

A/B testing is monitoring without interacting. Put down the binoculars. Pick up the phone and call.

Lloyd Tabb

Once you get a user, attribute where you got them, how much you paid for them, and the time it takes to recover from that acquisition cost. Don’t stay on the surface. You paid for those clicks. You need to know. And that’s the only way you’ll truly understand your customer’s lifetime value.

Lloyd Tabb

Your metrics influence each other. You need to monitor how. Don’t just measure which clicks generate orders. Back it up and break it down. Follow users from their very first point of contact with you to their behavior on your site and the actual transaction. You have to make the linkage all the way through.

Lloyd Tabb

Averages are one-dimensional vanity metrics. Without context, they leave out the why.

Lloyd Tabb

Vanity metrics are surface-level metrics. They’re often large measures, like number of downloads, that impress others. Use them to initiate partnerships and gain a following.

Clarity metrics are operational metrics, like the number of minutes a day your product actually gets used or how long it took for a user to get service. These are the hidden gears that drive growth. Use them to solidify your … [ Read more ]

Lloyd Tabb

… metrics that are elevated — from daily active users to revenue growth — effectively compare companies, but don’t necessarily help them run better. In fact, these measurements often slant toward what investors want to measure, showing if a company is valuable, not how it can create more value. […] These metrics serve a purpose — just not every purpose. Vanity metrics aren’t useless. They … [ Read more ]

Alex Le

As a company gets bigger, it’s scary to watch how most fall into longer and longer iteration cycles. Someone needs to be paying attention to this. Like, literally collecting data on how long every release is taking. How long releases of similar features are taking over time. How many features are getting launched per sprint, per quarter, etc. You have to know how long it’s … [ Read more ]

Rosabeth Moss Kanter

The tools of accountability — data, details, metrics, measurement, analyses, charts, tests, assessments, performance evaluations — are neutral. What matters is their interpretation, the manner of their use, and the culture that surrounds them. In declining organizations, use of these tools signals that people are watched too closely, not trusted, about to be punished. In successful organizations, they are vital tools that high achievers use … [ Read more ]

Jeffrey Pfeffer

Measures signal what is deemed important inside companies, because what is measured must be, almost by definition, important—just for the very fact of it being measured. Conversely, what is neglected by measures is, by inference, unimportant. Measures focus people’s attention. Measures typically drive rewards and reinforcement, because performance on measures has consequences for people’s raises, promotions, and job tenure. Therefore, and it should come as … [ Read more ]

David K. Hurst

To be effective, goals and metrics must be embedded either in a deep understanding of cause and effect or in a thoroughgoing learning process that leads to that understanding.

Michael E. Raynor

When setting priorities it is helpful to distinguish between absolute and relative performance. Absolute performance sets the minimum requirements — are you in the red or black, are you growing or contracting? Relative performance, expressed in percentile rankings, tells you where you have the most room for improvement and sets an upper bound on what is reasonable for you, given how well you’re already performing … [ Read more ]

Susan Fowler

I was a longtime aficionado of SMART goal setting when the “M” stood for “Measurable.” However, over time, I found that a specific, measurable, attainable, relevant, and time-bound goal simply was not SMART enough. I changed the “M” to “Motivating” and moved measurable into the “S” (Specific). Adding another dimension to make my goals more emotionally compelling worked for me. It seemed to work for … [ Read more ]

Russ Banham

A company needs to define the KPIs that best tell its tale from a strategic standpoint. Consultants advise starting with buckets like financial performance, customer satisfaction, operational performance, marketing effectiveness and employee performance. Then, they can devise a set of pertinent KPIs within each of these buckets.
[…]
This winnowing process depends on the type of business a company is in, its strategic goals and the … [ Read more ]

Sydney Finkelstein

Relying on averages, for anything, is a sure-fire method to cover up little differences that might have big meaning. An average removes the most interesting data from the discussion.

Don’t you want to know who is best, and who is worst, at something? Averages disguise this. Don’t you want to know what accounts for outlier performance, on either end? Averages cover this up.