We’ve all embraced Big Data. We’re all collecting data. We’re even beginning to actually use the data sometimes. Yet business doesn’t seem to be getting any better. What is it we’re doing wrong? As the industry is getting more experienced, it’s becoming more sophisticated in its use of metrics. Here are three metrics trends worth watching.

Like a football statistician, just because we can count it doesn’t necessarily mean it’s useful information, even if it’s interesting. (Time of Possession, for example.) Social media metrics can be particularly prone to this, writes Jonathan Rick in com.

“There isn’t a social media strategist in the world (including me) who hasn’t copied and pasted a seemingly fancy chart featuring important-sounding analytics, such as ‘total reach,’ ‘viral reach,’ and ‘engaged users,’” Rick admits. “But scratch the surface, and questions begin to arise. Is a total reach of 16,000 a lot? What’s the difference between ‘total reach’ and ‘viral reach’? What’s the difference between ‘engaged users’ and ‘talking about’? Which is more important: comments, likes, or shares?”

Instead, Rick recommends using the data to tell a story. “Instead of churning out esoteric metrics, focus on your most remarkable anecdote,” he advises. “No one will remember that you got 5,000 views on SlideShare. Everyone will remember that you got the White House on board.”

When you’re doing metrics, it’s important to make sure you’re measuring the right thing, not just the thing that’s easy. Take the legal department. “Law firms typically provide hours billed and rates charged,” writes Robert Ming in Inside Counsel. “What a CEO really wants to know from his general counsel is (a) whether the money spent on legal services helped make money (sales side transactions) or helped avoid harm or cost (risk avoidance), and (b) could the company have spent less and still achieved those benefits (best value).”

And while you’re at it, make sure employees don’t know what metric it is you’re using to evaluate their performance, or make sure it’s something that can’t be gamed. It’s human nature to make yourself look good, and if you’re using a metric like “hours spent” or “length of call,” then staff members are likely to do whatever they can to inflate or deflate their own numbers accordingly.

It’s easy to assume that a metric should always be related to cost, and that anything that reduces cost is a good thing. But that’s not necessarily true, as anyone who’s ever used “free” software that’s more trouble than it’s worth can attest.

In fact, some metrics don’t involve costs at all, writes Michael Ohler on the iSixSigma blog. “Saving money is not always the primary interest of Lean Six Sigma projects,” he writes. “When the primary metric is tied to a business metric, it is often enough to know that the project enhanced the company’s business capability. Even so, it makes sense for organizations to have a monitoring system in place for the results of their continuous improvement activities across all areas. The financial metric is not used for project accounting but rather to translate the project impact into a generalized business benefit.”

Moreover, in SixSigma training, reducing an expense itself shouldn’t be the primary metric, writes Cindy Bivians for iSixSigma. An example she describes was about maintenance costs for a company’s dispensers, which, as it turned out, were higher than they needed to be because the description of the problem was free-form text, where someone typically wrote down “Dispenser doesn’t work.” Creating, instead, a drop-down menu of choices for the people filling out the form ended up reducing unneeded maintenance calls and consequently saving money.

Plus, some metrics may be worth more than money, such as engagement, writes CFO Jeff Shotts in the Wall Street Journal. “Engagement, now defined broadly as user actions other than an actual purchase, has been proven time and time again to: (a) increase the average lifetime value of a customer and (b) drive powerful solutions to otherwise intractable business problems – both of which help an organization thrive,” he writes. “The more engaged your customers are, the more value your business can create and the more flexibility your business will have to solve problems in a unique and differentiated way.”

In fact, following some metrics may cost even more, because they are associated with other desirable business goals or save money over the long run. For example, a number of organizations now have goals related to sustainability as part of their business practice.

Not only that—executives are sometimes being compensated on how well the organization meets these sustainability goals, writes Josh Cable for EHS Today. “A majority of companies in the S&P 500 – albeit a slim majority – use sustainability as one of their metrics for determining executive compensation,” he writes. “53.8 percent of S&P 500 companies tie sustainability metrics such as workplace safety, environmental impact, and employee engagement to executive pay.” In particular, more than 90 percent of energy and utility companies use sustainability metrics to determine a portion of executive pay, compared with less than 40 percent of telecommunications, technology, and cyclical consumer goods and services companies, he writes.

As so many people are fond of saying, what you can’t measure, you can’t manage. But just because you can measure it doesn’t mean you can manage it—or even that you might want to.





