How to Make Performance Metrics Successful for Your Business

HOW TO MAKE PERFORMANCE METRICS SUCCESSFUL FOR YOUR BUSINESS

If you’re not sure what a performance metric is or why it’s the one thing you haven’t tried with your team to reach your revenue targets, let’s talk now.

You already have a team. It could be contractors, employees, virtual or not. To reach your revenue targets and make business feel easier, you need to dial in your team's performance. Let's dig in on how to make performance metrics successful for your business and your team.  

Performance metrics are more than a job description. (Tweet this!)

What you need to know when you start putting your performance metric plan in place with your team?

  • Why Performance Metrics

  • Metric Descriptions (getting the details right)

  • Consequences (will you lose TV privileges?)

  • Test Dive

  • Contract like you mean it

  • Who Pays for this stuff?

How to make Performance Metrics successful

First, let’s answer the burning question circling in your mind - why use performance metrics.

Why Performance Metrics?

Contractors on your team will love them if they want clarity on expectations. The number one reason work isn’t done right is lack of communication or miscommunication. Performance metrics are not the job description you posted to find your perfect teammate (you do have a job description right?).

We’re talking cold, hard numbers.  It’s not clear enough to say your VA will “respond to incoming email”.  You need to be crystal clear and say, “respond to incoming email within 24 hours from receiving”, otherwise responding within a week or month could be the norm.  If contractors do what they said they can do, performance metrics are a no brainer and will help make your business more successful.

Performance metrics measure what your team should already be doing.

Contractors hate them if they aren’t confident in delivering or when it’s easier to have a bit of wiggle room.  

So yes, performance metrics are a love hate relationship with contractors. Keep this in mind if you’re having an early discussion with someone you want to hire, or even an existing contractor on your team.


Metric Descriptions (getting the details right)

It’s not just about you handing out the performance metrics like a dictator and your contractor goes forth and delivers. You need to first have a discussion with your contractor to get their input so that both of you agree on the metrics.  The discussion is especially helpful to iron out any wording that could be misinterpreted (and you thought a ‘day’ was just a day!).

Did you mean business days or calendar days? 24 hours from your time zone or theirs or based on the date in some system?

Discussion also helps get clarity on what the contractor controls for delivering. If you have  a tech support contractor on your team, it means the tech contractor is only responsible for making sure your website is up and running, except when your web host does server maintenance. The server maintenance is something that isn’t in your tech contractor’s control.

Think through what you expect for results to define your performance metric.

If your performance metric is securing 3 interviews a month, you’ll need to be specific on what types of interviews count. You’ll need guidelines to make sure the interview fits your target audience and services.

Consider how’d you feel as a life coach and your team member just booked an interview for you on a pet related podcast. It counts as securing an interview right? Pretty sure you’re brain is shouting (probably saying it out loud too) “WTF I’m so not paying for this work and I’m definitely not spending my precious time to do the pet podcast”

Consequences (will you lose TV privileges?)

Consequences luckily at this stage of life have nothing to do with losing TV privileges. In fact you can go back to binge watching Netflix right after this.

It is common to have a consequence for not achieving performance metrics and it usually relates to money. You can decide to have a specific consequence for each metric or just have one for the entire group of metrics.

  • For example, an individual metric would be 5% invoice credit for missing metric #1 Attending 100% of the client consult calls.
  • A Group metric would be 5% invoice credit for not meeting 2 of the 8 different metrics for the job.

Consequences make it real and people start to care ALOT.  Just make sure you match up the consequence with the significance of missing the metric.

Plus, don’t make the consequence so complicated to calculate, it takes more time to do the math instead of focusing on the business.  

Test Drive

You’ve detailed the metrics, discussed with your contractor and now it’s time for a test drive. I’m a big fan of having a testing period, especially if you are including consequences. A 60-90 day testing period is key and helps get the kinks worked out.

It also allow time to see if what you expect to measure can be measured. Sometimes, you find the data isn’t available. Or, it’s not available at the detail level you need it. If it’s too manual and time consuming to collect, it might not even be worth it.

Contract like you mean it

After you go to all the work of getting the performance metrics nailed down, add it to the contract and make it official.  Even if you decide not to include consequences, you want the metrics to have the full support of the legal jungle behind it.  


Who Pays for this stuff?

Let’s be clear. You and your contractor are both spending time managing the performance metrics, tracking, reviewing, adjusting and discussing.  It's common practice in the business world that each person cover their own time and costs for managing performance metrics. It’s considered a cost of doing business just like consultation calls and buying supplies.  

The client and contractor both put in time to manage and measure.

Done right, performance metrics are a win-win and the relationship becomes a partnership. (Tweet this!)

Got a questions on a crafting a performance metric? Hit me up here or on Twitter