Hi, again! This is Ken Dawson, Chief Information Security Officer at ClearStar, bringing you another installment of For The Public Record, a blog that features thought leadership from the most seasoned experts on our staff, across all functions of the background screening process.
First, let’s start with some context for the discussion via a couple of quotes from people who are way smarter than I am:
“What gets measured gets improved.”
Peter Drucker, “The Founder of Modern Management”, (Source)
“Merely measuring something has an uncanny tendency to improve it.”
Paul Graham, Co-Founder at Y Combinator, (Source)
These quotes from Peter Drucker and Paul Graham speak to a concept in ways that are uncannily similar, but they come to it from different directions. Drucker’s message is from the standpoint of action or instruction for those who want improvement in an area—measure it. Graham’s idea strikes me as speaking more to the inevitability or power of measuring something— improvement will happen. Side note—at the end of that same quote, he advises caution that backs up his perspective: “Corollary: be careful what you measure.”
The common theme here is that measurement is an important factor in improving performance. Whether we’re talking about a company, product, team, or individual, the key to driving improvement is measurement—or at least it starts there. To increase the value of the data we’re collecting, we then need to focus on analytics and visualizations that help us to recognize patterns and to communicate the meaning encapsulated in the data we collect. Now, let’s look at this in action using a common desire of any company—increased sales.
Since this goal is so common, there are a ton of (somewhat) standard metrics around sales-related activity that people collect, all intended to increase sales. This makes sales an easy example to use, but also makes it hard to sift through all of the options to select some key metrics. So, if you disagree with my choices, keep in mind that I’m a technologist (as in, geek) and not a “sales guy”.
Sales by Sales Rep
Some ways that this can be visualized is a list, standard graph, and/or tiled leaderboard. The specific visualization and elements within it should be those that are important to driving success in your team. In the two examples, we see different approaches. The first is focused entirely on the end result—new revenue. The second takes a broader view on the activity of the sales team, including new monthly recurring revenue (MRR), new accounts, and the number of demo calls performed. Both of these provide comparisons that allow for the relative performance of each sales rep to be determined, as well as measurement against targets. The key here is that either of these allow an organization to use the data they are already collecting to drive the performance of the organization through:
- Healthy competition,
- Measurement against the goals, and
- Clearly specified priorities.
Overall Sales Growth
From a team or company perspective, you want to know the impact on the big picture or “how much did we sell?” Once you’ve collected the data, you may want to see the overall impact, like the speedometer-styled graph shows. In this case we’re taking the highest possible view, focused only on the end result—showing the overall sales growth percentage for the year so far vs. the goal of 20%. The more standard line and area graph gives more insight into how we got to this point. It lets us see how we’ve done each month against the target and the prior year. Again, both are looking at the same data, but are tailored to the needs of the organization. If you’re in an industry where sales are marked by fewer large sales, then the speedometer view may be best. If you need to drive a higher number of smaller sales consistently each month, then the line and area graph will be more helpful in identifying how you’re doing against your goal.
At this point, we need to go back to the beginning and focus on the idea of measuring individual, team, and company activity to effect changes that drive toward improved outcomes. As you (hopefully) see in the above examples, it’s not enough to just measure something or throw out some statistics. You need to pick the right approach, styles, and numbers to reinforce to everyone what is important and valuable. If your team has a wide range of individual performers (from bad to good), then a competitive view could help to motivate the poor performers, or at least help them to understand why another place may be a better fit. By setting targets and/or comparing to prior similar periods, you can help people to understand whether all the hard work is making a difference and whether that difference is enough.
Now, you’re probably wondering how this applies to background screening or HR or even our tagline: Human Capital Integrity. The nuanced answer (meaning short and lazy, in this case) is—it depends. But really, the key is that it doesn’t matter what industry, function, or discipline you’re talking about, the first step is to identify what you want to improve—employment verification productivity (faster turnaround), criminal history quality (fewer false or inconclusive searches), faster on-boarding of new employees (shorter time to hire), or happier new hires (people who stick around after being hired), for example. For each of those, you can set goals that can be comparative to a previous period, that are industry standard levels, or that provide some room for improvement for the team. When you measure these attributes and provide visualizations to the team/company, you will be on your way.
Thank you for hanging in there to the end! I hope that this serves to motivate you and your team to go beyond just collecting data and to focus on providing actionable measurements and analytics that empower positive change in your organization. This is For The Record.
Attribution: The graphs shown above all come from an article by Klipfolio that you can find here. We love their tools and think they’re great to work with. This article is not intended to suggest that these are the only ways to measure sales teams or that they are even the best for each situation. That, you’re going to have to figure out for your company and team.