98 – Performance Metrics: Boring Topic, Incredible Leadership Opportunity
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It’s true, nobody likes the micromanagement of intense performance metrics. And talking about numbers and data isn’t really the most exciting thing in the world.
But it’s not about the numbers, it’s about taking your people to a better place.
Toward the end of the show, you’ll get 3 very specific action items you can (and should) take with your team when it comes to performance.
- Your Employees Need To Know Where They Stand
- Your Employees Need To Know What They Are Working Toward (and it needs to be meaningful)
- Your Employees Need To Know What It Means and What It Takes To Be Successful
Some Additional Reading:
- 20 Shocking Sales Stats That Will Change How You Sell
- 107 Mind-Blowing Sales Statistics That Will Help You Sell Smarter
- 21 Employee Performance Metrics
- Why do YOU Measure Performance?
- What Gets Measured Gets Done. Or Does It?
Performance Metrics: Boring Topic, Incredible Leadership Opportunity
Before I started Your Best Manager, I worked in sales. Specifically, I was in the recruiting industry, leading a team of recruiters and selling out services to other companies so that we could help them recruit, hire, performance manage, engage and retain great people.
Now, if you have worked in a sales environment before, you will know what I am about to talk about all too well.
Sales is a numbers game. Sure, there is a lot more to it than that, but essentially everything is about numbers. The best salesperson has the highest, what? Sales numbers.
But it stretches beyond that because if the end result, sales numbers, can be tracked… then so can all of the activities that lead up to a sale.
For instance, did you know that it used to take 3.68 cold call attempts to reach a prospect? That was in 2007 and by 2013 that number was up to 8. So it takes 8 attempts to reach a prospect on a cold call.
Did you also know that in order to make a sale it takes at least 7 contacts? Where a contact is a phone call, email, meeting, etc.?
So if those numbers are true, why not track how many meetings and cold calls and attempted phone calls, and emails, and follow-ups, and EVERYTHING.
Welcome to the sales world, where literally everything is tracked.
I hated it.
I’d dial the phone, leave a voice mail and then have to record that I dialed the phone and left a voice mail. And that info was tracked and put into a spreadsheet, along with all the other sales activity I recorded, so that.
So that if my ultimate sales numbers had an opportunity to improve, it could be reverse engineered back to a metric along the path to success that would result in increased sales.
For instance, if my sales numbers were low, my boss could pull up a report and say, well, if your sales numbers are low, let’s look at how many projects you are working on? Hmm… that looks a little low as well, so why don’t we look at how many client lunches you have had this month? Okay, that seems okay, now let’s look at the number of new sales meetings you’ve had. Interesting, that’s also low, well let’s go back to the number of cold calls you’ve made. Okay great, you made 150 cold calls this week, that’s fantastic. But, oh, looks like only it was only 47 times where the prospect picked up. Alright, that’s what we are going to work on. Let’s get that 47 number higher. Because if you could get more people on the phone, you can get more new meetings and therefore get more projects and increase your sales.
In theory it’s perfect, in practice, it sucks. Because no one likes to be managed based on such tiny things as how many times they picked up the phone.
But this isn’t just about sales.
If you are into any sports, you know that data drives every single decision.
Baseball? It’s about batting average, but not just batting average, but on-base percentage, or the percentage of balls a player swings as that would have been out of the strike zone, or even the difference in batting average when the batter has 1 strike on them, versus 2 strikes.
Or let’s take hockey? It’s about things like the amount of time a player is on the ice during a game, or it’s about the number of faceoffs a player can win, or the average number of shots on net during the game, or how many goals were scored for and against while the player is on the ice.
Look into every sport and you see this. And it makes so much sense! Because if you can make a small tweak here and there to little things that contribute to bigger things, that you can improve performance.
Alight, well I promise that I’ll get to my point soon, but I want to tell you a story first.
It would have been about 5 years ago when one of our senior sales managers left our company and went to work for one of our sister companies. To give you some context here, this lady was an incredible salesperson and I learned so much from her as a boss to me at one point, a mentor and another point, and as a friend even now.
And at our company, when you are successful in sales, you are rewarded for your high performance. One of the rewards was an all expenses paid, a-la-carte trip to Cancun, which you’ll have to ask me about sometime because I was privileged to earn the trip twice and… I don’t know… it’s just… it’s amazing.
Anyway, this salesperson hit her performance targets every year, I don’t know how many years in a row, but let’s just say that if you gave her a goal to hit… she hit it, and not just hit it, she would blow it out of the water.
Now, as I mentioned, she left our company to go work for one of our sister companies. Essentially, that means that we both worked for the same global organization, but technically we worked for two different companies.
But these sister companies had another thing in common besides our parent organization. An incentive trip to Cancun.
But HOW you earned that trip was very different and I remember having coffee with her the following year and it was the first time, since I had known her, that she wasn’t sure if she was going to earn the trip.
And it bothered her.. a lot.
Not because she’d miss out on the trip, I mean, she had been down so many times, I’m sure the novelty had warn off somewhat, but it wasn’t about that.
What bothered her is the fact that she didn’t know if she was good enough anymore? Not whether or not she was capable, but she didn’t actually know if she had earned the incentive.
Which may sound weird, but let me explain how my company measured performance and how her new company measured performance.
In my company, if you hit a certain dollar amount of gross profit, you earned the trip. Black and white. You either did it or you didn’t.
In her new company, there weren’t any metrics. Her peformance was still reviewed, she still received feedback, there were still certain KPIs or key performance indictator she was responsible for, but there wasn’t a black and white metric or measurement to tell her that she had done it and achieved the big goal.
That decision was… just that, someone’s decision. Based on a ton of factors, most of which were outside of her control.
I won’t waste your time by going into the details of how the company operated, but there is a point to this story as well as everything else I’ve mentioned so far this episode.
In my case, as a salesperson, I hated the heavy focus on data and performance metrics. But I always knew where I stood and I had something I was working toward… something I could control and something where I knew that I either did it or didn’t.
It’s the same in sports. All of those numbers and stats are meant to help people achieve something worth achieving. Yes, some of the metrics and stats and numbers are annoying, but everyone knows where they stand, where they need to improve, and in sports… it’s a game, a finite game, where you have winners and losers. You and your team either did it or you didn’t do it. Your either number 1, or your number 2, or 3, or 4, or… well, literally every stat has a ranking… because there is data.
There’s no in between and there’s never any question about where you stand.
But in the last story I just shared about a highly successful salesperson. She went from knowing where she stood and having something to work toward, to questioning what high performance actually looked like and wether or not it even mattered.
Here’s the reality though.
I could easily say that the answer is to find as many numbers as you can find, identify a way to track that data, and all of a sudden you will have new insight into management strategy and your team will improve beyond what you thought was possible.
The problem, however, is this.
I hated my work being over-analyzed AND not every business can track performance the same way.
For instance, how easy is it to put metrics on a receptionist’s job? What about a radio host? What about a nurse? And even if you have metrics, some of them require such long time intervals to measure that day to day can seem almost meaningless.
Let’s take the politicians for instance.
Yes, there are indicators of good performance and poor performance, but you typically don’t actually know how well a mayor or a cabinet member or a party leader or anyone else really is doing, until a certain amount of time has passed or until they are faced with a certain challenge.
So on the one side, having too many performance metrics is a problem and on the other side, having too few performance metrics is a problem.
As a salesperson, I often felt micro-managed and limited in my creative ability to do my job because there were so many performance metrics. But at the same time, without having clear, controllable performance metrics, it can be hard for employees to know how they’re actually doing.
And that right there is the point.
Like many things, the whole performance measurement thing is about balance. Not doing too much of something and not doing too little.
And so rather than talk through a whole bunch of management strategies about building the right metrics into your business, although I am going to share a few at the end here to help you out, what I want to do is hammer home how important it is that performance is tracked and measured and how equally important it is to ensure that your employees have something to work toward.
This all comes back full circle to a topic that comes up on this show all the time:
As I say, all the time, that managers will always struggle with employee motivation and employee engagment if they don’t help their people find the correlation between performance at work and personal achievement.
So while Performance Metrics are a great way for a manager to track and measure how well an employee is doing and where they may need coaching, what’s more important is that Performance Metrics allow employees to know where they stand, relative to what they are working to achieve.
Let me say that again. While performance metrics are a great way for a manaer to track and measure how well an employee is doing and where they may need coaching, what’s more important is the performance metrics allow employees to know where they stand, relative to what they are working to achieve.
So if you are a manager listening right now, I don’t want you to start thinking about different metrics and qualitative or quantitative data. And I don’t want you to think about what activities or reporting you can do. And I don’t really even want you to think about how well your employees are doing right now.
Here’s what I’d like you to do.
I’d like you to find out whether or not your employees feel like they know where they stand, they know what they are working toward (and whether or not that’s important to them), and if they know, black and white, what it means and what it takes to succeed.
Let me unpack those three things quickly, and then I’m going to close off with some additional resources you can check out for more of the ‘hey what should I track and how should I do it’ stuff.
Do your employees know where they stand?
Don’t make assumptions here, ask them. For instance, does your top performer know that they are the top performer? Do they know why? Could they explain why? Could they teach what they do differently or better to someone else? Like, how clear is it?
The same goes for everyone else, and here’s just one example of why this is important. I had a conversation today with my father-in-law and he was speaking with a friend of his earlier this week who works in finance and was being considered for a promotion. Well, she didn’t get the promotion, looks like someone else did, and she has no idea why.
That’s someone who does not know where they stand and does not know whether or not they are ‘good enough’ for whatever next step or goal they have in mind.
Do your employees know what they are working toward? And do they care?
Again, no assumptions… ask. Your team may have an overall goal, a performance metric maybe, something that the whole team is working toward and something where individual performance contributes to a larger objective.
So for starters, are your people clear on what that is? That’s step one. But what you really want to get to is do they understand what achieving that big objective does for them personally? How is that tied to their gaols? They’re career aspirations? They’re personal desires?
This is huge when it comes to improving team performance… which is really the only reason why the ideas of tracking performance even exists, as Peter Drucker once said, “What gets measured, gets improved”
Do your employees know, black and white, what it means and what it takes to succeed?
This of course relates back to goal setting, but the point is, how do you know when you’ve arrived? How do you know when it’s complete? How do you know when you’ve achieved whatever that thing is?
It’s the idea of, what does good look like? Can you quantify it? Can you measure it? If you can’t quantify success, how do you know when you are successful? And if you can’t ever obtain success, what does that make you? A failure? I sure hope not.
That’s why it’s about not just knowing what it means to be successful, like knowing what the ultimate metric or merit is, but it’s about knowing what it takes.
What are the activities, the actions, the measurable, trackable things that your people can and should do, every day, that will lead to success.
Here’s the reality. As much as I hated cold calling and hated the data overkill, I knew that if I completed 25 cold calls and booked 3 sales meetings a day, I was going to be successful, in fact, that was a successful day.
Do your people have something that’s tangible like that?
This is the last thing I’m going to leave you with today. I said that I was going to share a few things to help with the strategy side, but I really don’t have the time to get into it, so check out the show notes, YourBestManager.com/98 and I’ll have a couple articles there for you to check out… but here’s what I want you to walk away from this podcast with today.
Every single day, each of your employees should be able to define what a good day looks like. And they should not leave, until they accomplished what they determined would make their day a success.
Because if your employees left work EVERY DAY, knowing that they had a great day and that they did the things that will ultimately make them successful and they knew that they took actions today that were going to lead to the accomplishing of person and professional goals?
You are going to be leading a great team. A fully engaged and highly successful team.
Now, of course, there is coaching from you required here because most people overestimate how much they can do and underestimate how long it will take and if you don’t coach on how to set up a good day… you’re going to have a bunch of depressed people when it comes time for everyone to go home.
But that’s really the best piece of advice I can give you.
Teach your people, every day, to define what a successful day looks like and do everything you can to help them accomplish that daily feat.
It’s leadership magic.