If you’ve set SMART goals – let’s say annual revenue, but it could be anything from growing your email list to training for a marathon – you’re probably already checking in from time to time to see if you are on track. The ‘M’ in SMART stands for measurable, after all.
But what types of metrics actually need to be measured? We could spend all day processing data and still not have results to show for it. In the book The 4 Disciplines of Execution, Chris McChesney and Sean Covey explain that there are actually two distinct types of measurements you need to focus on to execute your plan and achieve your goals.
Measure what you’ve accomplished.
Throughout the year when you take a look at your current sales, it feels like time for celebration if you’re meeting your targets. If you’re not, it feels like the mountain you’re climbing just got taller as you’ll now have to achieve more to get back on target.
These types of measurements – in this case, current revenue – give you a benchmark to see where you are in achieving your goals. They are called lag measures and are incredibly important for checking in to see if you’re on track.
The problem with lag measures is that they are reported after a result is achieved (or not), when it is too late to make a change which will actually get the numbers you want to see on those reports.
Measure what you can control.
Lead measures, on the other hand, are more malleable and help you to predict a result. For instance, if you have a product or service you’re selling and you want to increase your revenue, you’re probably going to need more customers.
The number of customers you have is a lag measure – it happens after the fact. While you can’t directly control whether someone buys from you, you can control how many pitches and sales calls you send out and what rate of them are accepted.
If you pitch 100 clients and land 5, then you have a 5% conversion rate – which means to get 50 new clients you know you would have to make 1000 sales calls. You have control over how many pitches you send out in a given week to achieve the results you desire.
Lag measures are important and should be recorded at regular intervals – usually monthly or quarterly. They can help you see if you’ve been taking the right overall actions.
Lead measures need a little more attention, as you may need to change course based on the information you’re getting back. Daily or weekly is a good rule of thumb. Your conversion rate may decrease after you’ve exhausted the list of people you know are more likely to buy from you OR you may start getting a higher conversion rate based on the interest you’ve generated with your previous work. Knowing in real-time what is happening will allow you to course-correct on a day-to-day or week-to-week basis.
Don’t get stuck in the lag measure cycle.
Measuring our results after the fact is generally easier, so we are more likely to actually do it. After all, the whole reason you are taking action is to achieve the goals you’ve set – and those goals are exciting.
Fitness is a great example of where you can get caught up in measuring the wrong thing. If you’re deciding whether or not you’re taking the right action based on your weight or how much you can lift, you’re focusing on the lag measure – the result you want in the end. What you need to measure are the things that go into achieving that result – minutes run, calories eaten, reps with your weights.
Set your intention.
Think about your current goal – what are two or three actions you can control that will help you achieve it? Your measurement system doesn’t need to be fancy. Just tracking your effort and results for a couple of key actions will change the way you see your results.