In times of business disruption or market swings, executives often first scrutinize their direct reports’ performance metrics. Are the “total sales” metrics accurately measuring success? Are the “quality” guidelines as closely aligned with production as they could be?
Then they slap on new ones.
Taking a hard look at performance metrics can be a useful exercise. Adding additional ones may help you manage your way out of challenges. But far too often, leaders underestimate what it takes to translate metrics into actual behavior. You may add 100 cold calls a day to your team’s obligations, but how do they achieve it, and how should management respond if it’s missed? Without answers, old habits creep back in, and very little changes.
I see this happen repeatedly. But why?
The root cause is usually one significant oversight: Metrics are a tool — not a panacea — for performance.
Metrics identify patterns, but they don’t tell you why that pattern exists or what to do about it. When a salesperson misses their cold call metric, is it related to poor time management? An insufficient call list? Or do they simply believe they can hit their results a different way?
Even more importantly, does the metric matter?
Metrics alone will never help executives lead through market shifts or other business challenges. Identifying and addressing unproductive patterns requires judgment and influence, something metrics can’t provide.
Instead, here are some best practices leadership should consider when managing their teams to performance metrics.
Keep it simple. Thoroughness isn’t the same as effectiveness. Leaders spend enormous amounts of time developing comprehensive metrics, thinking their thoroughness will make it easier to diagnose problems and provide better insights. Maybe they decide to increase the number of people on their active call list, making an incorrect assumption that this data point is tied to higher meeting numbers. But their assumption could be wrong, rendering the metric useless and convoluted.
Complex performance metrics are difficult to maintain, steal time away from coaching and confuse your team on what’s most important.
One solution: Keep performance management metrics to five or fewer and make sure they’re really linked to solutions. The result? More productive conversations, better clarity, stronger buy-in and more effective coaching.
Clarify the intent. Micromanagement kills team buy-in. If your teams feel micromanaged, it generally means you aren’t communicating the intent of your metrics successfully. I’ve seen managers roll out a new metric with no explanation because, to them, it’s common sense. The team then questions why the change is necessary. If you’ve levied a new guideline to address the loss of a major client, a need for diversification or a change in market conditions, say so.
Answer these questions for them: Why are we measuring these things? How will the data be used to manage teams differently? What happens if teams miss a metric? What training or other support will be available?
If we use metrics poorly, people will feel micromanaged. If we use it with intent — and express that intent — your team will understand its purpose and be more likely to buy in.
Coach your leaders. There are three phases to effective management using metrics:
- Defining the metrics
- Developing reporting
- Establishing consistent governance
Many leaders invest an inordinate amount of time on the first two, especially if the metrics are overengineered and complicated. This results in less time and energy remaining for the most important: the governance approach.
A clear governance approach answers the following questions: How are we going to lead our team differently based on these metrics? How often do we conduct reviews, and what’s the agenda? What happens if employees miss certain metrics? What coaching tools will we provide?
Too often, employees and line-level leaders don’t have clear answers, making performance reviews awkward and unproductive. If there’s no consistent approach across the organization, each leader will decide their own approach leading to confusion and inconsistency.
Metrics are a tool for leadership, not a replacement for it. If you plan on making any changes to your metrics portfolio or how you manage to it, think through the practices listed above to ensure they’re effective tools to influence and coach your team to better performance.
