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Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

Accountability Part 3: Metrics and Management

(This is the third of a five-part series for Small Business Trends on accountability in the new world, the increasing need for fundamental accountability in small business as the business landscape breaks apart into cyber vs. physical. Part 1 was War of the Worlds, and Part 2 was Both Sides Now. I’m reposting it here because this is my main blog.)

What if I told you I’ve built you a straw man? In my first two posts on accountability I looked at the vaporization of accountability and the splintering of work into real physical presence vs. virtual or remote. As if physical presence means accountability, and working remote means the lack of it. But what if that’s not the real problem?

The real problem is a simple combination of metrics and management. Simple to say, hard to do. Not unlike diet and exercise, or having more patience with the kids; everybody knows what’s right, but doing it is so much harder than knowing what you’re supposed to do.

And I say it’s a lot worse in small business, and entrepreneurship, than anywhere else. Why? Because in a small business setting you end up working with friends, and it’s really hard to give negative feedback to friends.

Some examples will help:

So through the years, watching what I don’t do well, I’ve developed my respect for metrics and management.

Metrics

It’s been a lot of years with a  lot of concentration on what’s good about business planning, and how it works in a business when it works well, that I’ve realized the magic of metrics. A good business planning process generates metrics throughout the business: not just the obvious sales and cost of sales and expenses, but milestones with dates and deadlines, and tracking of metrics such as calls, presentations, programming modules, trips, key word insertions, downloads, page views, conversion rates, subscriptions, leads, and so on. For every job there’s the hope of an objective metric that people can live and work with. A good business planning process goes from the high-level general to the specific steps and then to the metrics, and tasks, and responsibilities. Make commitments.

Riddle: in the classic bacon and eggs breakfast, what’s the difference between the pig and the chicken?
Answer: the chicken’s involved, the pig is committed.

Metrics are magic. Build metrics and a planning process, and, as if by magic, you and your team members (friends, or not) are suddenly standing together looking at the metrics. The positive and negative feedback is there in the numbers. You both see them together. You both remember what the goal was, and you look together at performance.

Management

Metrics are magic, yes, but not the whole solution. Accountability means what do you — your organization, your team, your company — do about poor performance? And that’s management.

You have to ask some questions: were the metrics based on real assumptions? Were they fair and reasonable? Did everybody understand them? Did the playing field (such as budgets, tools, access) change in the meantime?

And then, as you look together at performance based on those metrics, you have to be able to be the manager and do the hard thing. I don’t think I did the hard things all that well throughout my career. I had some successes with changing the job description for poor performers, which meant that once or twice we found a round job description for a round person who’d been in a square-person job. But I’ve also had some failures. The last time my company was named one of the 100 best companies to work for in Oregon, that honor was based on a confidential poll in which our employees gave us the worst marks for not weeding out poor performers.

I think it’s the baby-boomer ex-hippy in me, still, these many years later. As I came to adulthood in the late 60s, we all hated authority and mistrusted the establishment. With that in my background, it is hard for me to be the hard nose manager when the company needs it.

But if you look at the long term, most companies need it. Build the metrics as the first step, track them as the second, and then follow up, the very hard third step, to hold people accountable.

Paradox

Business is full of paradox. Especially strategy and management. I find it delightfully ironic that the splintering of the workplace into virtual and remote may actually increase the likelihood of tools and metrics to help build accountability. It can separate the physical presence from the performance, and make metrics easier to accomplish. That’s for my fourth part of the series, next Thursday.

And another paradox, sort of a postscript: That highly successful business leader I mentioned in my example above, the one who said a boss can have no friends in his company — he committed suicide.

2 responses to “Accountability Part 3: Metrics and Management”

  1. […] Business Management,Business Planning TweetI believe in metrics. Metrics and management go together.  You really can’t manage without them. But damn, don’t you hate them […]

  2. Thanks for sharing this stuff.

  3. The advice your (formal) Spanish boss attempted to instill in you re befriending subordinates reminded me of when I worked as a reporter in Europe. Formality. "We do it this way." Top down. Often class distinctions – all were common traits in business there.

    Synchronistically I was forwarded an email from a friend re a new book on the same theme re empathy in workplace, Wired to Care.

    I share your belief that when people go out of their way to find the sweet spot of mutual interest rather than the sticky spots of disagreement they are more likely to become higher-performing and happier together.

    They are more likely to like each other.

    They are more likely to accomplish something greater together than they can on their own.

    Surely that is the most efficient way for a firm or any kind of organization to optimize its performance.

    In this dire economy more business leaders would benefit from reading your post on accountability and metrics that includes the obvious – the human factor (people want to know how they will be measured – and involved in creating the metrics).

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