Metrics Plan, Part 1

In the book, Bare Bones Change Management: What you shouldn’t not do, Bob Lewis explained the seven must-have elements for any change management effort to have a chance of succeeding. Here are my takeaways from one of the topics discussed in the book.

In change efforts, it is natural to focus on the people aspect. Because the people element often poses the most substantial certainty over the success of the change, we put more emphasis on managing that element.

Equally important, we need to define the metrics. Bob described the metrics as:

“A clear account of what success will look like, how you’ll recognize it when it shows up, and, for that matter, how you’ll know when it doesn’t.”

Measurements of any kind drive employee behavior. That is why establishing business metrics can be tricky.

Useful metrics will have six properties: 1) Connected to goals, 2) Consistent direction-wise, 3) Calibrated for similar results regardless of who performs the measurement, 4) Complete so failures can be detected, 5) Communicated, so everyone knows how the organization is performing, and 6) Current due to metrics are being monitored and adjusted for ongoing relevance.

Bob suggested dividing the metrics into three different levels: 1) Bottom-line improvement, 2) Business outcomes that drive the bottom-line improvement, and 3) Internal effectiveness improvements that support the business outcome.

There are only three types of bottom-line improvement: 1) Increasing Revenue, 2) Decreasing Cost, and 3) Managing Risk. Within each of the bottom-line improvement, there are a limited number of business outcomes that can support the improvement.