I spend a lot of time sorting through performance metrics at BizEngine, which I suspect is something I have in common with many, many small businesses. What’s great about using performance metrics for everything from sales to marketing is that it can help you develop a picture of how your small business is doing, what improvements can be made to your current methodology and what initiatives are bearing significant fruit.
Performance metrics are invaluable for those reasons and many more, and every company should be using the statistics and data at their disposal. But what happens when metrics become everything, when your employees and your entire company are reduced to figures instead of living, breathing human beings?
BNet has a good article on this very topic:
Is our near-obsession with quantifying every aspect of employee performance a good thing? The Harvard Business Review warns that an over-reliance on metrics could be damaging your business. It’s easier to manage numbers than people, writes contributor Adrian Ott — and that tendency could mean that you’re not investing enough in really knowing how your employees work and make mistakes.
Let me provide you with an example. In my high school days, I worked for a giant retailer that may or may not rhyme with “Clears.” We had an express policy of not accepting returns on certain items, a policy we were encouraged to enforce. Our managers, however, had decided it was more important to make the customer happy, but did not make that a clear piece of policy. As a result, at the lowest levels we would stand there and get yelled at for not accepting a return, and only later would a manager swoop in, grant the customer a return and solve the problem.
The problem with that approach is that it forces employees to either stick with a policy that makes customers unhappy or freelance and run afoul of the very rules they’re supposed to obey. Your numbers may tell you that it’s desirable to refuse returns on a particular product, but that ignores the human side of the coin. Customers never react the same way every time, and your employees are not robots.
So the point here is not to avoid metrics—that would be foolish—but to employ their lessons understanding your customers, your employees and the way your business works. How do you use metrics?
Photo credit to zeafonso at http://www.sxc.hu/photo/674243
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