choosing appropriate metrics

I’m doing a lot of work right now for my main client on a product, called Pulse,that is used to help organizations track the performance metrics of their investments.

Now, normally, if you invest money in a business, you want a return, so you measure numbers like “revenue” and “profit” and “cost of goods sold” and “margin”. You want to know that the business is doing all it can to make money, because you, then, have the opportunity to make money.

But some businesses have different goals, such as drilling wells for water in Africa, or encouraging small business growth in India, or employing women in South America; they aren’t designed just to turn a huge profit, but to have a “social impact.” Such organizations are typically called “impact investors” or “socially-responsible businesses.”

Of course, they need completely different metrics. Their investors still need to know that the million dollars they invested isn’t being used by somebody to take a cruise or buy a fancy car; they want to know that they are actually making a difference. But they need things like “gallons of pure water available” or “number of local raw material suppliers” or “women employed”. So Pulse gives them the ability to track those numbers.

At lunch today, a colleague said something that made me think about personal metrics tracking: it’s important to make sure that you, in your life, are tracking the sort of performance metrics that matter to your career goals.

The first thing anybody ever says about your resume s to “quantify your impact.” If your work resulted in another 50K in subscribers or a million dollars in sales, you put that down. The problem is, if you don’t work for a) a company where you’re privy to that sort of information and b) in a role where there is a visible correlation between your input and quantifiable output, it’s pretty hard to do. As a programmer, for example, it may not be possible to say “the search feature I added to this page resulted in 100 more subscribers per day,” and the company’s financials may be too locked-down to say “those subscribers equated to a 2% profit margin increase” or whatever.

Before you get sidetracked in thinking about creative ways you might go about quantifying the fictional programming problem above, let me just say that it might not matter. If you are a programmer and you are likely to be hired by another technical person, it’s more important for you to quantify other things: languages learned, the number of projects you did, the lines of code, the size of the database. A technical person may not expect you to know–and may not care–what your impact was on the company’s profit margin. After all, it’s not like you made the business decision to upgrade the search form, and it’s not likely that you’ll be asked to make business decisions in a programming role!

On the other hand, if you’re trying to get a business job, then it’s important for you to choose metrics that quantify your business impact.

For me, I’m making the transition from being a hands-on technical person to being a more strategic-level business person. So, a given project description could go from:

“Implemented web-based social networking application using open-source PHP engine and MySQL database to display appropriate subscriber information, including customized dependent picklist functionality and advanced profile search.”

to

“Evaluated technology frameworks for web-based social networking application, installed and configured chosen framework, including appropriate security updates, and customized default features to support mission-critical functionality.”

to

“Built social networking application to support 200 initial users, growing to 5000 within 3 months, within constraints of non-funded startup environment, making business cash-flow positive for the first time.”

Pretty different statements for very different goals. But they all refer to the same actual work.

You could go beyond just thinking about metrics in terms of career, if you were so inclined: of course, “how much money do you make?” is the usual go-to, but it doesn’t have to be. How many countries have you visited? How many different restaurants in town have you eaten at? Or, how many hours have you volunteered for charities? How much blood have you donated?

As I’ve said many times before, you have to run the numbers, which means you have to measure. But equally important is making sure that your measurements are useful in determining progress towards your goal. And, of course, you need your goal.