This is an important point. More and more I’m focusing on metrics as a vital component of any useful business planning process, but then I read Entrepreneurs: Beware of Vanity Metrics from Harvard Business Review, which warns of …
… the curse of vanity metrics, numbers which look good on paper but aren’t action oriented: website hits, message volume, or “billions and billions served.” They look great in a press release, but what do they accomplish?
Metrics are magic, or at least that’s what I’ve written in a number of places, related to business planning. But maybe I should have written good metrics, or valid metrics. Metrics as measurement become accountability, which becomes management. Build the metrics into your planning process, and you have better management, better steering, and better teamwork. Not just dollars, but metrics you can track, and metrics that are specific to different jobs, functions, and goals.
Good metrics might be sales, costs, expenses, trips, seminars, ads placed, publications, leads, presentations, posts, tweets, retweets, calls, minutes per call, incidents per serial, and so on. You need things you can track.
But vanity metrics happen all the time. Those are the numbers that look good but come after the fact, without a direct link to cause or performance. I’ve used vanity metrics often enough to know. When preparing a presentation, find a number that looks good, and pretend that it shows progress.
Cool … but is that what you were aiming for?