more-arw search

Q&A Forum

Too many business metrics. Can you over Metric?

too many business metricsThere are many threads here on Proformative about KPI's, Metrics, etc. My question is simple: Can you over metric. Can you over analyze and miss qualitative signs that won't show up in quantitative analysis? When do you stop measuring and start communicating, interacting and seeing issues (both good and bad) that can't be put into table from accounting/finance datum?

Answers

Topic Expert
Jaime Campbell
Title: Chief Financial Officer
Company: Tier One Services, LLC
(Chief Financial Officer, Tier One Services, LLC) |

Agree, based on quantitative evidence, on what the drivers are. Make sure you've got the "K" in "KPI" on lockdown. Run with that for a good long while until it's time for a re-evaluation due to shifting business conditions.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Great question. The answer is Yes and No –

Can you over metric - No - I look at KPI’s as ratios that are linked directly to your goals & strategies. In a perfect world you set strategy, determine how you will measure success with KPI’s, and communicate the approach to the organization. Monthly you show the KPI you previously communicated. Non-Financial individuals can understand the organizations success at achieving goals and strategies, which you previously communicated, by observing how the KPI changes over-time.

Can you over metric – Yes – I have seen financial people hide behind the metrics. They look to the ratio, instead of understanding the significance of the numerator and denominator that generate the metric…which is inexcusable. There is no replacement for understanding the numbers cold. If I fall short of goal, I need to know why. But it is just as important to understand why I exceeded the goal.

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

What I used to do with the 200 people who reported to me was to assemble a vertical team (across levels) to confirm the Keys in KPI's, then implement, measure every month and get commentary each quarter. The comments allowed for some celebrating (just informal, and, occasionally, with small gift certificates. End of year we re-calibrated, not adding more, but sometimes replacing KPI's. Those particularly influencing a KPI reviewed their work and thoughts as quarterly and annual performance reviews.

Maintaining the focus actually resulted in more efficiency and less surprise at performance and salary/bonus reviews.

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

I think you can "over metric", especially when they start to give conflicting information. A metric is only valuable if it provides some direction for tomorrow that is actionable. KPIs and the such should be dynamic based on the issues the company is experiencing. Some metrics need to change from daily to quarterly/annually and visa versa.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Over metric also happens when the source of the metric is misunderstood and/or data is examined from so many parts that the sum of the parts exceed the real total.

If the readers don't understand this issue, then the KPI's will be misapplied.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

We were guilty of analyzing everything at one point, if we could measure it we did just for the sake of measuring it. Then we realized it was overkill and overwhelming everyone, which caused most people to avoid it all together.

I think it's fine to provide all the data because different people may find certain metrics more useful than others. For leaders we need to set the expectations of which ones are in line with goals and need to be focused on. And as someone also mentioned we need to be able to understand them and how they impact the business.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

When metrics replace strategy/goals. When business planning becomes "paint by metrics".

Dmitry Faybysh
Title: CEO
Company: Bankcard Analytics
(CEO, Bankcard Analytics) |

Metrics and KPI should be aligned to your long term strategic plan. The strategic plan may be 3, 5, 7, etc years out or whatever your company does. The annual plans normally align to the strategic plans. The Metrics and KPI for me are about what we are doing today and now to help achieve the annual plan that helps achieve the longer term strategic plan.

At any point in time you may be tracking 30 to maybe as much as 100 KPIs, but i would say that 10 (+/-) are the key KPI for that year to support the annual and strategic plan. The KPIs may change year over year to align with the annual plan and strategic plan.

Chris Shumate
Title: Accounting Manager
Company: Dominion Development Group, LLC
LinkedIn Profile
(Accounting Manager, Dominion Development Group, LLC) |

I am currently in the world of a company over metric-ing based on trying to determine shared services for corporate employees. Our company is going through a major overhaul with internal customers we support. My boss, our company's Controller, the IT manager, HR manager, and me have had to do a granular analysis of what each of us do for the over 35 entities we support. We are considered corporate. Everyone else is considered to be supporting a specific company and their time is being charge accordingly.

I facetiously suggest 6-minute time sheet blocks so that our time could be allocated as such. Not everyone got the joke...

The biggest issue is that the largest company we support feels as though it is being charged too much for the services the back office gives. Our internal metrics are putting undue pressure on relationship within the company, honestly it has divided more than anything, creating an "us verses them" mentality.

Meanwhile we aren't analyzing enough the impact of true value added work with outside customers and vendors.

3577 views
Topics
Products and Companies

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.