Metrics for managers

Measuring work performance is vital to ensure we are making good decisions. Indeed, there is an old saying: “If you can’t measure it, don’t change it.”

This particularly applies to process innovation where the cost benefit of changes can usually be accurately quantified before they are ever made.

Do innovation managers deliver?

As for innovation management, the same applies.

If you are investing in innovation then it is important to understand the return that investment delivers. That is real returns and not abstractions like – “It’s important to be seen as innovative!” Further, the return should ideally be forthcoming within 18 months. If this is not happening then it may be time to entirely review your approach.

Measuring the cost benefit

It is interesting that in many businesses the cost benefit of most employees can be accurately measured.

In processes of course this is easy, so too in accounting and law and consulting, where people are expected to bill typically 70-80% of their time to a client at a rate of at least double their actual cost. This is easy to measure with timesheets.

Abstract job functions

But what of the managers of:

• Products
• Categories
• Sales
• Marketing
• Communications
• Finance
• HR

And what of their subordinate staff and executive assistants? I am often amused when I see the English television show The Office, with people silently poised over computer keyboards. One wonders just what value each and every person is delivering and, moreover, if and how it is measured?

Senior management

As your career develops you may reach the dizzy heights of senior management or even get lost in the bureaucracy. Apart from some KPIs that can usually be met by clever operators, there is usually no real measure of the return on investment that you or even your position delivers. What would happen if you or that position was no longer there? Would somebody take up the slack, perhaps the business may well proceed as normal?

In the case of very senior positions, perhaps those people making several millions of dollars per year, this is an interesting question.

One answer may be to explore the value and accuracy of decision making. For example, one person at the top might make one better decision than a person who might have been passed over for that position, and that single better decision might be worth millions, or even billions.

Steve Jobs was a classic example of a great decision maker.

More work to be done on this

The bottom line is that we need to find proper ROI measures for all positions to be sure each and every staff member is delivering at least twice what they are costing.

More will be said on this in coming months.