Leaders can be vain. We get so focused on what we want, we often lose sight of any useful way of measuring progress to what we are after!
In my career, I have learned the hard way how sideways everything goes when carefully measuring the wrong things. I have also learned how to avoid this trap. Avoid vanity metrics!
Vanity metrics often sound impressive (“Two million page views”). But they just as often reflect little in business or customer value. In the “Page Views” example, why do we care? If we get paid by the page view, we might. Otherwise, it may only be giving us a false sense of accomplishment or progress. Fundamentally, what value is the visitor getting from viewing a page? How do we derive value from that page view? The underlying value proposition may be there. But meticulously tracking and touting our page views does not provide that insight. We must go deeper.
I coach businesses to approach measuring value in an empirical way in a few simple steps:
- Orient yourself in what phase your product, service, or program may be.1
- Based on the proposed phase above, pick a relevant key performance indicator (KPI) and set a target for it.
- Design a way to test and track that KPI and see if it moves the needle on your target.
- If it did, rinse and repeat as long as the phase remains an area of focus.
- If it did not, pick another KPI relevant to the phase until you find one that moves the needle.
Sounds easy, right? While the process is, it takes practice and skill to arrive at useful metrics that truly reflect value creation. In your search it is important to consider metrics that are understandable, comparative, show trends in rates/ratios, or that give insight into behavior changing. It is equally important to understand whether you need to consider working with qualitative or quantitative, exploratory or reporting, leading or lagging, and perhaps most importantly, correlated or causal data and metrics.
This can seem like spaghetti mess of measuring tapes or as an overwhelming proposition. But don’t worry. You can untangle the mess with a little expert help. And I’m so vain, I bet I could help you. Book a session with me now and let’s get started with humility.
1 For a great framework on types of metrics that apply to phases of customer lifecycle, check out Davie McClure’s, “Startup Metrics for Pirates: AARRR!“
