The only way to effectively gauge if a company is growing and moving forward with its strategic plan is to create a system to regularly measure progress and performance. To achieve consistency in that measurement process, business readers need to identify the objective performance measures that matter most when it comes to meeting goals at all levels - company wide, departmental and individual - that will lead to success.

Unlike subjective performance measures that leave everything in the eye of the beholder and can lead to guesswork and confusion, objective performance measures are universally defined and can be evaluated by anyone in a leadership role. From monthly revenue growth to website traffic growth to customer satisfaction metrics, the hard and inarguable data attached to those measurements make it clear if goals are being met and whether action needs to be taken to address shortcomings.

Let’s look at some of the general rules and guidelines for utilizing objective performance measures in your startup, so you can keep an eye on what’s most important without getting overwhelmed with data that serves little purpose.

The Do’s and Don’ts of Objective Performance Measures

  • Do measure what matters most, with a small handful of metrics for the company and department levels
  • Do base the measures around SMART goals in your strategic plan, so they’re relevant to overall progress
  • Do select measures that may be unique or custom to your business, to protect your special advantage

  • Don’t overmeasure. Check in on your data every two weeks as a general rule so growth and performance strategies have time to take effect.
  • Don’t keep the data a secret. Transparency on progress toward well-conceived goals lets everyone in the company know about success or the need to improve.
  • Don’t move the goalposts. Keep subjective opinions and biases out of the measurement process so there’s no confusion about what is truly important for company health.

What You Measure Matters In Objective Performance

In his book “Measure What Matters”, Silicon Valley venture capitalist John Doerr breaks down that valuable objectives for companies (and individuals) are direction and should be a little uncomfortable. He argues that reaching beyond what is easy and already achievable will help to spur innovation and the development of new skills within an organization to fuel growth at all levels.

Doerr uses Objectives and Key Results (OKRs) as his measurement rubric, while Key Performance Indicators (KPIs) are a commonplace part of the vernacular in Silicon Valley. Whatever the name, the most important principle with objective performance measures is consistency in what’s being measured and the relevance of those metrics to the success of the company.

If a given metric or related group of them are showing unexpected success, then that creates the opportunity to study what is being done (and if it is scalable) and to reward performers who are demonstrating they have done above and beyond. The reverse of this is true, though metrics that show underperformance should be treated with a “remedy, not punishment” approach to help correct what isn’t being done effectively.

Having clearly defined measures at the lower levels of an organization also makes it easier for managers to have a clear picture of which team members are performing effectively as opposed to which ones are doing their best to appear busy but not actually working toward stated goals.

Give Your Objective Performance Measures Time To Breathe

Once company leaders have identified the top-level, departmental and individual measures that will be monitored to gauge success, the next step is to walk away from them for at least a week, if not more. Most performance is tied to a strategy or set of tactics that take time to be implemented and take hold before they can produce the desired results. That reality means there should be some leading indicator metrics built into the framework for objective performance measures, but it is also important to not become fixated on checking spreadsheets daily or more often.

Being too fixated on the numbers makes it likely that fluke events and aberrations will create an overreaction on the part of managers, which can lead to burnout and paranoia for team members who might be giving their best effort each day.

While it is important to keep an eye on the metrics that matter and correct things that need attention, be aware of the risk of “missing the forest for the trees” when it comes to being too zealous in utilizing objective performance measures.

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Instituting Objective Performance Measures In Your Startup

Start with the SMART goals that are contained within the company’s most recent strategic plan, and pull out some of the most important measurable sales, marketing and strategic milestones that will move everyone forward on that plan. Break those milestones down into departmental and individual metrics as needed, and then communicate that framework as widely as possible with the understanding of when and how the measures will be examined to make sure everyone is moving ahead at the desired pace.

Need help creating SMART goals? Get started with a simple SMART goal builder to get a feel for the process.