“What gets measured, gets managed.” Peter Drucker’s famous axiom rings true for all businesses, regardless of their size or industry. Anything that gets measured will naturally receive more attention by you and your employees. Metrics are measurements important, quantifiable business activities. Metrics can instantly tell you how efficiently your business is operating, and make it easy to identify inefficiencies. The most common metric is the sales conversion funnel, but what you measure is limited only by your imagination.
Metrics help your company transition from a startup to a professionally managed company. Like most tools, however, they can also do more harm than good. For example, they can be time-consuming to implement effectively. They can also create an administrative burden. Resist the urge to track anything that can be measured. Find the right balance and focus your energy on a few useful metrics.
The best way to get started with metrics is to ease in. Pick your company’s most important business activity, and find a good way to track and analyze it. Starting with one metric will give you a good idea of how valuable and time-consuming metrics can be. From there, continue to expand your set of metrics slowly.
