Performance metrics as a key component of strategy has been the standard practice for the past few decades. Metrics are used to give strategy form and purpose, taking an abstract concept and making it actionable.
The downside of using performance metrics to define strategy is that the company can lose sight of its strategy in the numbers. The metrics represent the strategy and ensure its on track for success, not its entirety.
Leaders have plenty of metrics to choose from, but they’re not enough to drive business to the next level of bottom-line performance. The way leaders interact with their team has a positive or negative impact, and the key is making those metrics meaningful.
Leadership and Metrics
Metrics are imperfect. They represent business intent and the desire to capture a goal, but they’re not a tool to accomplish the goal – they’re a measure of whether the efforts are successful.
For example, an objective could be to provide a better customer experience. The metrics for tracking progress could be evaluating customer survey scores. These numbers tell leadership whether the business is positively affecting customers, but the team could get too wrapped up in maximizing their scores instead of accomplishing the true goal – exceptional experience.
This is even more apparent in sales, which is competitive and metrics-driven by nature. Salespeople may be pushy or forceful, both in person or by sending follow-up emails or robocalls. They may get the sale, but at what cost?
Incentives, pressure to meet quotas, and sales culture can all be tied to a performance metric system that’s used to monitor everyday business activities. You can’t have sales incentives without the tracking of sales numbers. You can’t have goals and pressures to meet them if they’re not measured.
Measurement isn’t a bad thing. In fact, it’s necessary to the business environment and success. But it has to be in tandem with leadership, not the sole driver.
Be a Leader Who Inspires Action
Discussing strategy and performance metrics with the sales team isn’t enough. Leaders need to set an example with accountability to inspire action. Focusing everything around a metric only makes sales teams more likely to focus on at the expense of reaching the goal.
Organizations see breakthroughs when teams are inspired. They’re more productive and push everyone around them to strive for greater heights, and that starts with leadership. Inspiring leaders are those who use their unique mix of strengths to motivate individuals and teams to take on challenges – and hold them accountable for the results.
Being a “do as I say” leader isn’t the way. Unlocking better performance comes from empowerment, not command and control.
Here are two exceptional examples of this in practice:
Howard Schultz returned to Starbucks as CEO after taking eight years off. He realized that customer experience had fallen behind in favor of diversification and automation, both done in pursuit of performance and growth. He then took action to shift the company back in the customers’ direction to give them “that first sip feeling” once again.
In a bold move, Schultz shut down 7,100 US stores for several hours to retrain baristas on the art of making espresso. This showed what he thought it would take to make Starbucks the brand it once was.
Another example is Alan Mulally who came to Ford Motor Company in 2006 to change the company’s operation. Though he made several significant moves, one of the most notable was when he applauded Mark Fields for admitting to a failure during a high-profile executive meeting.
Nothing like that had ever happened at Ford Motor Company before, and it set the stage for a culture of open and honest communication. Eventually, the rest of the culture followed.
These examples show bold, one-off moves, but they’re indicative of leaders known for performance and inspiration. This is what inspiration leadership looks like in a market driven by performance metrics.
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