I’ve Been Working In Tech For Over 20 Years — And This Is The Best Way I’ve Found To Measure Employee Success
And how having well-defined metrics can guide your team in the right direction.
By JC Grubbs, founder of Tandem
Discussing metrics helps employees realize how much their individual contributions matter to the company.
The late, great business writer and philosopher Peter Drucker once said: “What gets measured gets managed.”
If you run a business, these are words to live by. But, when measuring success, companies typically make the same two mistakes: either not measuring anything at all, or measuring the wrong things.
Companies that don’t use success metrics typically grow and learn based off of purely anecdotal experiences. They don’t even collect, let alone interpret, the data—which can lead to flawed decision-making and poor outcomes.
On the other side of the coin are the companies that do measure things, just the wrong things-they track metrics that aren’t important overall to the enterprise.
When choosing the metrics by which you’ll measure success, one good place to start is by tying them to your company’s mission. Track things that are directly related to your company values, core functions, and overall strategy. If your metrics don’t match up to your guiding principles and goals, you’re not only wasting your time, but drawing focus away from the most important things. And, you’ll likely be picking up false signals that can lead you away from your objectives.
When you decide how you’re going to measure success, you’re telling your employees, “These are the things that matter most.”
Well-defined metrics guide each team and individual employee in a number of ways:
- Having clear metrics sets clear expectations. The lack of specific objectives is one of the biggest issues companies across all industries face. Without setting clear expectations, your employees will lack direction.
- Easy to understand, visible metrics help employees trust the process-and their co-workers-more. Teams operate best when everyone knows what everyone else’s expectations are, because it allows people to disengage from their coworkers’ responsibilities. The first lesson drilled into Marines at boot camp is to have complete faith and trust in the person next to them. Creating trust and respect is key for any high-functioning team.
- Setting clear expectations eliminates employee uncertainty. If people have wiggle room, they will wiggle-and that creates issues. For example, I always tell my sales team that “bench time” is bad for everyone. It’s bad from a financial standpoint, but even more importantly, people tend to get restless and issues bubble to the surface when a team doesn’t have a goal in front of them.
The best success-tracking system I’ve found in my career is surprisingly simple.
Our metrics produce signals that warn us when something is off. Investigating those signals leads to vital insights.
When measuring our engineering team, for example, we look at agile development pace, or what we call “velocity.” To measure velocity, we first assign point values to tasks. Then, we look at how many points are “completed” in a given sprint, usually 2 weeks. That number is the team’s velocity, and it’s instructive in helping us plan for the future of a project. It also gives us a lens through which to view productivity over time.
It also helps identify variables we may not have considered. For example, if a team’s velocity is 10 points one week and 50 the next, it probably doesn’t mean they worked one-fifth as hard that first week. More likely, it’s a warning sign that a process simply isn’t working as it should or that some sort of blocker exists.
Another strategy we use is having project leads fill out report cards, which account for everything from project and client management to timelines, budgeting, and production. We measure each area on a red, yellow, green scale. We look at groupings of these ratings over time to find trends. For example, if we notice a yellow or red path forming, we’ll break down our processes, identify root causes, and make adjustments.
In a meeting, you get much more useful information by saying, “Looks like you have a lot of yellow in this area. What’s up?” rather than, “How’s it going?” In a sense, the entire process is simply a question generator-but a well-directed question generator. It ultimately results in precise, insightful answers that lead us to things that need to be addressed.
We’ve been doing this since we started the company, and the questions and what we measure have morphed over time. We now better understand what questions to ask and what’s truly important to us. And we’ve learned it’s an ongoing process that requires constant revisiting in order to consistently receive useful results.
We’ve found that part of identifying what should be measured includes consulting the people being measured.
I used to create metrics in a vacuum based on my own experience. But the process became exponentially more productive when I started including our project leads and other senior influencers. They deeply understand our mission and core values, so they were able to critically examine potential metrics and identify important things I might have missed, as well as things that we just don’t care about anymore as a company.
Discussing metrics helps employees realize how much their individual contributions matter to the company. It allows them to set their own goals, in part, and often results in their feeling more ownership over their responsibilities.
This is why it’s so important to not only create success metrics, but constantly revisit them, realign them with your company mission, and ensure you’re measuring the right things.
Originally published on Minutes.