Sometimes we focus too much on traditional metrics, here is a great post on non financial measurements….
This is a guest post from James Slavet of venture firm Greylock Partners. Slavet’s investments include Coupons.com, Groupon, One Kings Lane and Redfin. Greylock Partners has invested in Facebook, LinkedIn and Pandora..
After years of leading teams and then, at Greylock, watching some of the best startup CEOs in the world, I’ve learned that the most important metrics are often ones you never read about on the income statement or in the financial press.
“If you can measure it, you can manage it” is a business saying that goes way back. Maybe it was Henry Ford who said that, or Peter Drucker? Regardless, most managers only measure outputs, not inputs, which is like telling a Little League team to score more runs, rather than actually explaining how to swing a bat and make contact with the ball. Similarly, most companies measure traffic, revenue or earnings, without considering how to improve the company at an atomic level: how to make a meeting better, or an engineer more productive.
Here are five metrics that great teams should measure:
Metric 1: Flow State Percentage
Jobs that require a lot of brainpower—software programming for instance—also demand deep concentration. You know that feeling when you’re “in the zone,” cranking on something. That is flow, a term coined by psychologist Mihaly Csikszentmihalyi. Unfortunately, most of us are constantly interrupted during the day with meetings, emails, texts, or colleagues who want to talk about stuff. These interruptions that move us out of “flow state” increase R&D cycle times and costs dramatically. Studies have shown that each time flow state is disrupted it takes fifteen minutes to get back into flow, if you can get back at all. And programmers who work in the top quartile of proper (ie uninterrupted) work environments are several times more productive than those who don’t.
Ideally programmers and other knowledge workers can spend 30% – 50% of their day in uninterrupted concentration. Most office environments don’t even come close. To get started, ask your engineers to track for a few days their personal flow state percentages: how many hours each day are they in flow, divided by the number of total hours they’re at the office. And then brainstorm ways that the team can move this number up. For example, perhaps there’s a little paper sign at each person’s desk that says “Go Away, I’m Cranking.” Or maybe you have a day where no meetings are allowed. Tom Demarco has written insightfully on the topic of flow.
Metric 2: The Anxiety-Boredom Continuum
Years ago, back when I was younger and cooler, I took a salsa class with my wife-to-be where the instructor said something that really stuck with me. He said that his goal was to keep all of his students in the pocket between boredom and anxiety – but closer to anxiety. In other words, we shouldn’t be so overwhelmed that we break down and give up, but we also shouldn’t be coasting either. He kept the rhythm fast enough so that we were challenged, but not so difficult that we lost the steps completely. And he kept tuning the difficulty level of the class to stretch but not break us.
This same anxiety-to-boredom continuum also applies to managing people. Star performers can get bored easily, and often function best when they’re expected to rise to great challenges. You want expectations to be high, but not completely overwhelming. With this in mind, check in with your employees periodically about where they are on this continuum, while also keeping an eye out for signs of where they stand. If they have low energy, or are showing up late and leaving early, they may be bored. If they’re responding to small setbacks with anger or frustration, or getting sick a lot, they may be pushing too hard.
Metric 3: Meeting Promoter Score
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