By Betsy Burton
Define Positive Performance Metrics for the New Year
Based on both informal and formal surveys that I’ve conducted over the years, I found that less than 40% of organizations define any effective performance metrics.
And even more surprising, less than 30% of those organizations go back and track the metrics.
Organizations need performance metrics, especially to support business transformation so they can track their efforts and make sure they are executing correctly.
They are also essential for garnering and retaining executive support for transformation investments.
The problem is that metrics are often foisted onto people and don’t even match the business strategy or goals. As a result, performance metrics are either ignored or placated.
As we get to this new year, business and technology leaders have an opportunity to define a new set of impactful and positive metrics.
How do we do that? There are a few basic principles that organizations should employ when defining performance metrics.
Metrics Must Be Linked To Business Strategy
First and foremost, metrics must be linked to the business strategy, goals, and outcomes.
Metrics must measure execution that must be completed to support business transformation.
Further, performance metrics must cascade down from that strategy throughout the organization.
Anyone within the organization must understand how they are contributing to the business strategy and business outcomes.
Metrics Must be Achievable
Performance metrics must be achievable by whomever is responsible for delivering on a given metric.
Too often organizations define performance metrics that are aspirational but don’t link to execution.
People must feel that they can achieve the metrics being given to them, and as mentioned above understand how those metrics contribute to the business outcomes.
Metrics Must Be an Incentive
Too often metrics are put in place to measure what actions people do rather than their value.
Metrics must be defined and presented as a positive incentive not a negative punitive measure.
Employees and managers should view metrics as something that highlights their accomplishments and their contribution.
Metrics Must Be Agreed To
Positive metrics must be agreed to by both senior executives and the leaders/employees responsible for executing those metrics.
Metrics should not be forced onto employees in a way that they don’t understand the value of the metric.
Metrics Must Not Be A Surprise
Metrics must be something that highlights the value of what people are doing and creating on a regular basis.
Metrics must not be a surprise to either employees or managers.
The last thing an organization should do is give metrics and then not discuss them or update them until the end of the year during a review.
In this case, metrics are ineffective because they are not driving behavior, and in fact the metrics have become a disincentive.
Metrics must drive positive behavior to achieving business outcomes, not create frustration.
Metrics Must Be Updated
Achievable metrics must also be updated. The reality is the context of our business, an employee’s life, and our team dynamics change.
That is the reality of today’s dynamic business. But oftentimes organizations define metrics and then don’t update them based on the context that is changing.
Metrics must be updated to reflect achievable outcomes for the employee, their team, and the business based on the current context.
Bottom Line
Employees and leaders, for the most part, want to do the right thing for the business. Making metrics well known and achievable is the way to define positive metrics.
Positive metrics are much more likely to be achieved because they are seen as an incentive to deliver business outcomes rather than a stick.
They are also significantly more effective because positive performance metrics are a way for the employee to show off their value, not just what they do.
This leads to a more positive engagement between executives, leaders, and employees.
Take the opportunity of the New Year to create positive, business-outcome driven performance metrics.
This blog is a part of the Business Transformation blog series by Aragon Research’s VP of Research, Betsy Burton.
Missed the previous installments? Catch up here:
Blog 1: A New Blog Series on Business Transformation
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Blog 2: What Are the Benefits of Supporting Business Architecture?
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Blog 3: How Do Business Architects Gain and Retain Management Support?
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Blog 4: How Do We Find and Recruit Great Business Architects?
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Blog 5: Is a Charter Necessary to Start a Business Architecture Discipline?
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Blog 6: Product Managers Can Make Great Business Architects
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Blog 7: 4 Necessary Steps to Successfully Start a Business Transformation Effort
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Blog 8: Developing an Executive Business Case Presentation for Business Transformation
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Blog 9: How Do You Model Business Transformation?
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Blog 10: What Is a Business Capability Model?
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Blog 11: How to Develop Valuable Business Architecture Deliverables?
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Blog 12: Yes, Meta Is Conflating Its Metaverse with AR/VR on Purpose
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Blog 13: Business Transformation Change Management Requires Good Governance
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Blog 14: Using Business Model Canvas to Express Future-State Business Model
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Blog 15: How To Make Business Transformation Less Scary
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Blog 16: Meta and Twitter: Examples of How Not to Do Business Transformation
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Blog 17: TOGAF as a Business Architecture Framework Has a Core Flaw
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Blog 18: Thankful For My Life Transformation Mentors
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Blog 19: Transform 2022: Top Technologies Presentation
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Blog 20: What Do You Do About Low-Code/No-Code Citizen Developers?
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Blog 21: Practice Integration and Inclusion Not Just Acceptance