Sit down with most CFOs to discuss success indicators, and there will be a lot of talk about EBITDA and ROI tossed around. If you’re meeting with a COO, prepare to chat about KPIs and SLAs. Called in for a conference with a CMO? It’s likely that CPC and CAC will dominate the discussion.
Leaders often relish metrics because they can tell a compelling story. Numbers are clear measurements of progress, goal attainment, and growth. They provide the raw data that helps executives identify successes and gaps, develop forecasts and strategies, and alter direction when necessary.
But what happens when these tell-tale metrics, these mathematical indicators, these numerical storytellers do not resonate with executives? What if the CEO doesn't live or die by NPS like I do? That’s when it’s time to put the numbers aside and find another solution.
Qualitative vs. Quantitative Results When numbers fail to get the point across, look to qualitative data for reporting. Often, the real story lies beyond raw statistics and trends.
For example, when a company measures employee engagement, they often do so with the aid of internal surveys. And while numerical ratings are often included within questionnaires, the open-ended questions are far more telling when it comes to causes, underlying factors, and explanations. The numbers may indicate a slight uptick in job satisfaction, but the accompanying explanations explain why. Without the additional details, leaders are left wondering what caused the increase. Was it the company gym that was just installed? Or maybe it was the elimination of broccoli from the company cafeteria menu. Or perhaps it was something more obscure like the across-the-board 25% bump in salaries (you never know).
When analyzing sales results, is it enough to know that subscriptions were up 24% in the last quarter? While that fact in itself may be greeted enthusiastically by the C-Suite, understanding the causes would be much more helpful for strategic planning going forward.
Measuring Impact Going beyond metrics and qualitative data, you will find the most telling of all performance measurements: Impact. So, you had a record-setting month with your core product line – but what does that mean for the long-term growth and competitive positioning for the company? You reduced headcount 11% while increasing productivity 16% – but how does that impact your operational capabilities and customer satisfaction?
When evaluating results, it’s important to measure them against your company’s strategic objectives. While a significant headcount reduction is welcomed, the CEO likely will be more impressed by the fact that this reduction enables the company to consolidate its warehousing operation and close a costly facility.
“CAR” Achievements Seeing results is only one part of the picture. Knowing how you arrived there is critical as well. When reporting, follow the CAR format:
Challenge: What was the situation or problem that needed to be addressed?
Action: What was the strategy and plan of action that attacked the challenge?
Result: Did it work? Did the action solve the challenge? What were the quantitative and qualitative outcomes?
Through a multifaceted approach, reports and measurements are much more meaningful than numbers alone. Do you have anything to add about performance measurements? I’d like to know your thoughts.