Metrics
What gets measured gets improved
Every metric has to exist for a good reason.
Worst first: time and money is clearly being wasted.
For each documented process, what decision workflow will be triggered if a metric is at or below a what threshold.
The information for these reports need to be seen ASAP.
- losing money
- losing clients
- failing to comply with regulations
- security failures
Closed Loop Control Process
If you don't measure it you can't improve it.
The purpose of measuring the performance of anything is to indicate where decisions need to be made.
| Metric | Result | Threshold | Decision Workflow |
|---|---|---|---|
| Future Bookings | Failure | < 40% | Paid Advertising |
| CAC | Failure | $200/customer | Channel Review |
| Provider Saturation | Success | > 80% | Promotion/Bonus Analysis |
Strategic Review
Analysis of good news for strategic review in six week cycles that relate to projects that implement tactical experiments to achieve the overarching strategic objectives that are aligned with an organisation's vision and mission.
Take care of the bad news and the good news will take care of itself.
Outcomes and Decisions
Measuring the performance of a Role, Product or Service should indicate where decisions need to be made.
| Metric | Result | Threshold | Decision Workflow |
|---|---|---|---|
| Future Bookings | Failure | < 40% | Paid Advertising |
| CAC | Failure | $200/customer | Channel Review |
| Provider Saturation | Success | > 80% | Promotion/Bonus Analysis |
When setting thresholds some numbers are important to be aware of.
Tactics
| Failure Decisions | Success Decisions |
|---|---|
| Better training? | How much more to reinvest? |
| Wrong tactics? | Adjacent expansion? |
| Wrong strategy? | Take on more complex/riskier bet? |
| Cancel the experiment? | Scale recruitment? |
| Cancel contract? | |
| Cancel role? |
Key Performance Indicators
Primary
| Page | Notes |
|---|---|
| Liquidity | |
| Cash | |
| Time | |
| Wealth |
Investing
| Page | Notes |
|---|---|
| Risk | |
| Discounted Cash Flow | |
| Net Present Value | |
| Total Addressable Market |
| Metric | Target | Benchmark Source |
|---|---|---|
| ROE: 5-year Avg. | >= 17% | |
| Return on Invested Capital: 5-year Avg. | >= 17% | |
| Pre-tax profit Margin: 5-year Avg. | >= 1.2 | |
| Industry Avg. Pretax Margin: 5-year Avg | ||
| Price/cash flow ratio <= 0.8* | Industry Average price/cash flow ratio | |
| Price/cash flow ratio >=0.1 | ||
| Debt to Equity Ratio <= 0.8 | Industry Average Debt to Equity Ratio | |
| Income per employee >= 1.1 | Industry Average Income per employee |
Human Resources
Marketing
Quality of Service
Software Development
Related
| Page | Notes |
|---|---|
| Action Lists | Workflow completion failures |
| Dashboards | |
| Frequency | |
| Data Sources | |
| Liquidity | |
| OKRs |
For a piece of information to be desirable, it has to satisfy two criteria:
it has to be important,
and it has to be knowable. - Warren Buffett