The document discusses the importance of evidence-based management and the use of metrics in making informed business decisions. It outlines a 12-step process to create effective employee metrics, emphasizing the role of metrics in linking company strategy to daily actions and enhancing accountability. The goal is to focus on results, refine business operations, and improve management practices through measurable outcomes.

1. Using Metrics to Define Success
December 2015
material minds

2. Evidence Based Management
Evidence Based Management is making its inroads into the world of business albeit a bit slowly. The
logical ones among you might wonder, if managers don't use evidence to make decisions, then what
would they use?
What they do is make decisions based primarily on gut feel, habit, ideology, or even better, wishful
thinking.
Evidence based management means getting the facts and then using those facts to make
management decisions. Simple isn't it but few people do it.
Evidence based management does not mean waiting to get all the facts, completely ignoring your
gut, or ignoring ethics or values. It just means getting the best evidence you can in the time allowed
and using that evidence as one factor in how you make your decisions.

3. Metrics, or what is often called Key
Performance Indicators, are simply
measurements about key business
items such as results, customers,
process and people.
Metrics are used to determine how a
business has done, whether it is on
track, and how it looks like it’s going
to do in the future.
They are the evidence upon which to
base a decision.
What are Metrics?

4. There are a number of key
advantages for a business
that uses a well-developed
metrics program in managing
what it does.
The secret to implementing strategy successfully involves
translation of that strategy into the daily action of all
employees and providing a strong link between those daily
actions and the strategy itself. That is the role of metrics.
Using metrics will enable you and your team to focus on
things that really matter to the organization. This allows you
to filter out extraneous matters that have no material affect
on the business.
Using certain types of metrics, especially sales ones,
allows you to accurately forecast results and thus have a
much better chance of meeting your objectives.
Metrics enables employees to know what they are
accountable for and enables their managers to hold them
accountable in a way that is clear and unambiguous.
Why are they important?

5. Focus people on results
Set expectations
Refine a business model
Drive activities
Define jobs
Improve delegation
Manage performance
Motivate
Coach
Improve communication
How you can use metrics
Metrics are a very powerful
tool that you can use to:

6. What is expected of them How they’re doing How they can improve
The following is a simple 12 step process to enable you to produce individual or team metrics for
every employee in your organization
12 Steps to create powerful employee metrics

7. Figure out what you produce1
At a fundamental level, your job is to change something. You are taking a certain set of inputs and
changing those inputs and then passing what you have done off to someone else. The end result is what
you produce. The things you produce could be:
Data stored in a computer
database.
Communication in the form of a
letter, report or proposal.
Knowledge
A physical or digital object.

8. Put simply, your end user is the individual,
team, or department for whom you are
doing work. It is not necessarily your boss
but it very well could be.
In determining who is your end user, you
must figure out which of the following is the
recipient of your output.
• Another person or multiple people in
your team.
• Your boss.
• Someone or more than one person in
another team in your company.
• Someone or more than one person in
another company.
The end user is important as it is this
person who will be the judge of the quality
of your work. Since all results must be
externally verifiable, the end user is the
person who will provide external validation.
Define who your end-user is2

9. Having defined what you produce or the outputs
of your work, you need to determine the level
priority for them.
The objective of this exercise is to determine
which 3 to 5 things you produce you should
develop metrics for.
Prioritize what you produce3

10. Step 2 - What does Success look Like?
Define success4
For each of the four to five outputs you have prioritized, you will need to define what
success looks like in order to be able to measure it.
Defining what success looks like is one of the most critical aspects of assigning a job to an employee. If
you can’t define what success looks like then you’ll have trouble figuring out how to get there and the
employee will never know if they’ve gotten there.

11. Payment
At the highest level, an
end user can pay you for
what you produce.
Election
Sometimes there is no
payment but someone
elects to proceed to
another step.
Approval
Some other activities
result only in approval or
disapproval of your
output.
Satisfaction
When there is no
payment, election or
approval, the end result
must default to
satisfaction.
There are essentially only four results that arise from giving what you
produce to your end user. These should be results over which you have
control and where control isn’t shared with someone else.
Define what types of results you produce5

12. Measure results6
Speed
Finally, you can measure cycle
time or the time from the start to
end of the process which
concluded with the result you are
measuring.
Cost
This cost measure only applies
when you get payment and
measures the cost of the item
you provided in dollars or time in
order to get payment.
Quality
Your result quality is measured by
the $ received in payment or the #
or percentage who elect to
proceed or who approve of or are
satisfied with what you’ve done.
For each of the four types of results we identified, there are three measurements that can apply to
those results. Select one or more of these ways to measure results.

13. Define the activities for producing results7
Simply put, an activity is a series of actions or steps taken in order to
drive the results that you defined in the last section. Having created some
result metrics, it is important to turn to look at creating some activity
metrics. Activities can be broken down into four categories
Creating
When you produce
something new like an
article you sell, a report,
a program etc, you have
created something new.
Reviewing
Some employees are
assigned the task of
reviewing or approving
work done by others.
Recording
Accountants spend a lot
of time recording
transactions and other
people in an
organization spend time
recording things in
databases.
Communicating
This activity
encompasses any
verbal, not written
communication and
would include telephone
calls, meeting,
speeches, etc.

14. Measure the activities8
Speed
Finally, you can measure cycle
time or the time from the start to
end of the activity.
Cost
Measure the cost of the activity in
dollars or time to complete.
Quantity
Measure how many times do you
have to undertake and activity to
drive a result
For each of the four types of activities we identified, there are three measurements that can apply to
them. Select one or more of these ways to measure activities.

15. Is it really a Metric?9
Are results expressed as a number?
Is the result externally verifiable?
If not, express them as a number.
Change the result so that it is
externally verifiable.
Are activities expressed as a number If not, express them as a number.

16. Who owns the metric?10
Multiple teams involved.
Multiple companies involved
Company metric
Government metric
Multiple people in a team involved in
the activity.
Team metric
One person involved in the activity. Personal metric

17. Does the activity drive results?11
Does the metric owner have control
over results?
Will doing more of the activity bring
better results?
If not, change who owns the metric.
If not, revise the activity or result so
that they are related.
Does the result form part of your
boss’ results?
If not, eliminate result to improve
alignment.

18. Tying it all together12

19. Buckminster Fuller said
that ”If you want to teach
people a new way of
thinking, don’t bother trying
to teach them. Instead, give
them a tool, the use of
which will lead to new ways
of thinking.”
Metrics are a tool to focus
managers on results and
improve their leadership
capabilities
They connect company
strategy to the daily action
of all employees.
Metrics are a tool

20. Putting it All Together

21. material minds
Helping companies execute
strategy better by connecting
strategy with the daily action
of all employees.
Charles Plant
416 458 4850
cplant (at)
materialminds.com
@cplant
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This is a five part series on Strategy Execution and is comprised of:
1. Strategy Execution
2. Using Metrics to Define Success
3. Job Design and Delegation
4. Performance Management and Communication
5. Coaching and Motivation