Business metrics: You’re doing it wrong. Let’s fix it.

Business Metrics

I’d probably need to write an entire book to discuss everything fraught with business metrics, but because no one would want to read that, let’s do a blog post instead. Business metrics are supposedly the defining feature of the modern business age. Ever heard the term “Big Data?” You probably have. You might already be at the point where you want to smack someone across the face for using that term, and you almost definitely have a LinkedIn connection who calls themselves a “data evangelist” or “business metrics ninja.” People are jokes.

The thing is, yes — business metrics and data/information will someday be a major growth-driver in businesses. Right now, it’s mostly people running around yelping and screeching about it with no real action items. There are a variety of reasons why this is happening, foremost among ’em being “change is hard.” Also, as Stephen Dubner of Freakonomics has pointed out, using business metrics violates a lot of executives’ “gut feel” moments. You think execs will buy into something that makes them less relevant? I’ve got a bridge I could sell you.

I have dozens of amazing stories about business metrics, so let’s start there.

Business metrics: Two quick, semi-funny stories

I was once in a meeting around Google Analytics data. Let me try and set this up for you. You’ve got two teams of people. One is concerned about “A” (doesn’t matter what it is) and one is concerned about “B.” The data is presented — business metrics! — and “A” is outperforming “B.” Take a guess as to what happened.

The team associated with “B” instantly — and I mean within seconds — claimed “the data is wrong.” Because it didn’t fit their viewpoint. But the data was not wrong. This is the first problem with business metrics. So long as “actually understanding data” resides in a few people’s heads, everyone else can claim “Oh no, that’s not right.” That sucks.

Second story. I’ve had maybe 3-4 jobs where I sent out “data” reports (usually just website traffic) to a big list. At my last job, I was doing this and would splice some jokes/pop culture references into it. People liked it, and then they didn’t. I get fired (different reason!) and a few weeks later, this other kid takes it over. So he basically sends out 85 rows of Excel data and VPs are flipping shit. “I don’t have time to read this! I’ve got tons on my plate!”

That’s problem II with business metrics: you probably don’t care unless someone has told you that you have to care, so context is crucial.

Business metrics vs. vanity metrics

Massive problem in many companies right here. There are “business metrics,” which are essentially KPIs tied to ROI. (This blog post is like a fucking eye chart right now.) It’s stuff that drives your business forward and is measurable.

Then there’s vanity metrics, i.e. “The Shrine of Big Numbers.” These are numbers that mean nothing, but you report them because they’re big and impress your boss. Everyone does this, so don’t pretend you haven’t. Some of the biggest culprits are:

  • Impressions
  • Cooked-book attendance figures
  • X-metric as opposed to Y-metric because Y looks better
  • Pageviews
  • “We reached this many people…”

Vanity metrics are useless. They exist to make certain people feel they’re relevant when, in fact, their job could be automated to a toaster oven and no SVP would know the difference. They are not business metrics. So let’s stop confusing those two first off.

Business metrics: What do you need to do this right? 

If you’re honestly trying to “compete on data,” here’s a smattering of people you might need:

  • A person who sets up the processes and touch-points for collecting the data
  • Someone to scrub the data (multiple entries, spam, etc.)
  • A team that analyzes the data
  • A crew that reports/presents on the data
  • Standardized decision-making around what the data says

This is very hard. Many companies do 1 or 2 of these things, whiff on the rest, and think they can hit targets. You absolutely cannot. Here’s what happens in each case:

  • Missing the process: You’re collecting the wrong stuff.
  • Whiffing on the scrubbing: You’re analyzing the wrong junk.
  • No analysis: Well then, what did you collect it for?
  • Presentations aren’t happening: There’s no chance that executives will care now
  • Bad decision-making: This is common in many orgs, but that doesn’t excuse it

You basically need five groupings of people (or 3-4 and automate some parts). Before you bellow about headcount, stop and think. Is this important to us? Can we make money off this info? Business metrics might be your future. If it is, you better do it right. Yea?

Business metrics and storytelling

There’s documented power to business storytelling, although many miss this and say “Pfft, that’s a marketing thing.” Here’s a tremendous truism about data and business metrics, though: while executives value it, they usually don’t understand it. Remember: a 58 year-old guy who’s been in his vertical for 35 years has only recently been asked to “compete on data.” He might know how to look at a balance sheet (sadly, he might not) but … this is a new thing to him, and change is hard. He’s gonna need a little bit of help.


This is the big part everyone misses: business metrics only work if you can take the data and tell a decision-maker “Hey, this is what it means.” Now, of course, look at some of the examples above. The decision-maker might immediately tell you “Fuck off son, the data is wrong!” That’s a real concern. But if he/she is willing to listen, there needs to be a story around it. It’s kinda like this:

  • We collected information from these people/segments …
  • … at this point in their journey/path with our products and services …
  • … here’s the process we used as we did this …
  • … the results indicated that such-and-such happened …
  • … all things held equal, our best immediate course is “A”

If you’ve ever worked at an office job for seven seconds, you know the real deal isn’t that at all. It’s mostly email after email, followed by “Who owns this?” and a couple of sidebar conversations where someone is “concerned about the data’s accuracy.” Pretty much, we turn “scientific method” into “hair-on-fire bullshit” and we expect amazing, data-laden business metrics driving growth.

That’s a big leap.

Business metrics and failure

Even though there are data-backed, bottom-line cases for the value of business failure, most companies hate discussing failure. At most jobs, the common path around “transparency” is “replace something with something that makes it seem successful.” That’s how business metrics become vanity metrics, above. You whiffed on a target, so you replace the target with a cheapened metric and everyone smiles. You do this enough and you’re both (a) a liar and (b) a terrible boss, but who cares if the bonuses are fat. Amirite?

It’s really hard to do business metrics well unless you have a culture of honesty and transparency, and most companies do not. You can still grab, scrub, analyze, and decide off data and business metrics, but there will be a lot of politics, BS, under-cutting, and the like preventing true success. That’s just what I’ve seen in dozens of jobs.

What else you got on business metrics?

Ted Bauer