The Right Metrics to Measure Your Organization’s Success
Every organization needs to learn how to evaluate its progress, but how do you define and?measure?how close you are to meeting company goals and how effectively you’re using your resources?
First, let’s define?measurement:?A system of metrics that ascertains and reports in quantifiable units the degree of progress towards achieving a goal.
There are four key project management metrics you can use to evaluate whether you’re properly leveraging your resources as you work toward a goal. These metrics can not only show you whether you’re optimizing your resources, they can provide you with vital information to help you mitigate issues in your organization before they become too serious or unmanageable.
4 Key Project Management Measures
There’s an endless amount of tools organizations can leverage in order to measure the effectiveness of a project and their team’s progress towards a goal. However, it’s during the?planning?phase that leadership should?define and identify?the four key metrics as future measurements for a project’s success:
Let’s dive deeper into each of these measurements.
1. OKRs (Objectives and Key Results)
OKRs comprise a strategic framework for both the?objective?and?key results?a company needs to achieve its goal.
Many organizations define these objectives via qualitative descriptions, while defining key results as a set of metrics that measure their progress towards the?objective.
For instance, this is how you would define an OKR:
We will____(objective)?____as measured by ____(key result)?____.
2. KPIs (Key Performance Indicators)
KPIs are performance measurement tools or formulas that organizations use to identify a team’s progress on a project or other activity. These indicators differ from OKRs in that, while an OKR is a framework, a KPI is a metric. This distinction means that the?key result?of an OKR could be the KPI.
It’s important for project leaders to choose the right KPI to ensure the team is making progress on all goals. It’s also crucial for management to understand the specific priority and how to measure it to clearly communicate this information.
While organizations can use both qualitative and quantitative measures, teams far prefer to measure progress quantitatively. Importantly, a KPI can only measure what has?already happened?and is not a forward-looking measurement but rather a lagging measurement. It indicates whether or not you’re making progress towards your goal by tracking it over a period of time.
Leaders who want to begin developing KPIs to measure their organization’s progress can look to the SMART criteria for guidance in creating them:
Specific
Measurable
Achievable
Relevant?(to the goal)
Timebound?(for a particular period)
Points of Measurement for KPIs
Potential Issues to Consider with KPIs
3. Milestones
Milestones are actions or events that mark important stages of development within the project being completed. They serve as checkpoints throughout the life of your project.
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4. Deliverables
Deliverables are measurable and tangible outcomes of a project teams provide as a result of executing on it. Consider which deliverables are essential in helping your team achieve a goal.
What Gets Measured?
In the words of Peter Drucker, “You can’t manage what you don’t measure.”
We’ve previously stated that resource management is the most important responsibility of any leader. This includes making sure you:
As such, the answer to “what gets measured?” is?resources.
3 Key Resources
It’s crucial to?track the most valuable resources of your organization. While there are endless resources a leader can measure, the most important ones are:
Let’s explore these further:
Time
Time is our most precious resource; how we use it is contingent upon our?energy, discipline (or willpower),?and?focus. It’s important we use time effectively because it is a “keystone” resource. When learning how to manage our time,?prioritization?is critical as it helps us understand which tasks are most important to our?mission, which tasks we can?delegate?to other people, and which tasks we can automate through?technology.
Technology?and?delegation?give us back our time. This is important to note because poor use of time in business increases capital costs. In other words, time is not free. You pay for it with the capital resource as well, so, when it’s wasted, you essentially burn two resources.
Human Resources
An organization’s people are its most important asset, which is why measuring individual team member performance is critical.
Are employees getting results by?achieving the top goals of the company? How much time and money do you have to invest in them to obtain those results?
Leaders also need to measure themselves the same way. After all,?you?are a human resource too, which means that, as the leader of an organization, you must measure?your?performance.
Keeping a watchful eye on?employee metrics?can help you get a clear pulse on what’s happening at your organization. Employee metrics can include:
Capital
Capital is another limited resource. We need to monitor our expenses and measure the return on our capital investments.
While most leaders already know to measure capital, it’s a mistake to neglect measuring?time?and?human resources, as both are extremely valuable and perhaps, even more valuable than money.
The Bottom Line
By measuring different factors in your organization, you can ensure you’re optimizing every resource at your disposal.
We hope this article gave you a better understanding of the measurements within your realm of responsibility as a leader. While it may seem like unglamorous work, setting up these frameworks for success can have a major positive impact on your organization’s goals.
Looking for more tips to help your organization thrive? Be sure to download a copy of our free eBook,?The 10 Step Arootah Success Formula.
Disclaimer:?This article is for general informational purposes only and is not intended to be and should not be taken as professional medical, psychological, legal, investment, financial, accounting, or tax advice. Arootah does not warrant or guarantee the accuracy, reliability, completeness, or suitability of its content for a particular purpose. Please do not act or refrain from acting based on anything you read in our newsletter, blog or anywhere else on our website.
Director of Digital Marketing and SEO
2 年These are very important and being able to measure the progress of each compared to the big picture so you can adjust your resources accordingly.