What Are You Really Measuring?

Most business leaders have a dashboard.

Revenue.
 Profit.
 Labor costs.
 Sales.
 KPIs.

Those numbers matter—but what if they're only telling part of the story?

In this episode, I'll challenge a common leadership assumption: that measuring more numbers automatically leads to better results. Instead, you'll discover why many of the most important drivers of business success never appear on a financial report.

Learn the three areas every leader should be measuring if they want to build a stronger culture, develop better people, create loyal customers, and achieve sustainable business growth.

In this episode you'll learn:

•  Why financial metrics are lagging indicators 
•  The difference between measuring outcomes and measuring behaviors 
•  Four measurements every successful leader should be tracking 
•  How your measurements shape your company culture 
•  Questions to evaluate whether you're focusing on what truly matters 

The Three Leadership Measurements

• People Growth

• Customer Experience

• Leadership Consistency

This Week's Leadership Challenge

Review your business dashboard and ask yourself:

"If someone looked only at what I'm measuring, what would they conclude matters most in my business?"

You may discover you've been measuring success...

instead of measuring what creates success.

Transcript

SPEAKER_01 0:37

And what is that just to actually move your business forward? So whether you're in the office, on the job site, or just starting your day, grab a cup of coffee and let's jumpstart your week so you can leave better, work smarter, and build a better business.

SPEAKER_00 1:00

Today I want to talk about measuring what matters. One of the most common sayings in business is what gets measured gets improved. And I believe that's true. But it only matters if you're measuring the right things. Businesses love numbers.

SPEAKER_01 1:22

Revenue, profit, labor cost, gross margin, customer counts, KPIs. We build dashboards full of metrics.

SPEAKER_00 1:34

We compare this month to last month, this quarter to last quarter, this year to last year. And there's nothing wrong with that. In fact, those numbers are really important. But here's the perspective I want to offer today. Those numbers don't create your business. They simply report what's already happened. Revenue is yesterday's story. Profit is yesterday's story. Employee turnover? It's yesterday's story. Customer retention? That's yesterday's story as well. They're all outcomes. The question isn't whether you're measuring your business. The question is are you measuring the things that create those outcomes? And today I want to give you three additional measurements that every business should be paying attention to. Not because they're easy to track, but because they predict the future of your business. Okay, I've already mentioned the obvious things we measure, business health, revenue, profits, cash flows, margins, sales, all of those matter. They tell you whether your business is financially healthy. But remember, they're the scoreboard. Imagine watching a football game where all you saw was the final score. You'd know who won, but you'd have no idea why. Did they play great defense? Did they dominate possession? Did they get lucky? The score doesn't tell the whole story. Business numbers are the same way. They're essential, but they're just incomplete. Now let's talk about the measurements that many businesses overlook. Ask yourself, are my people becoming better every month? Not just busier, but better? Are they learning new skills? Taking on more responsibility? Growing in confidence? Are my leaders having coaching conversations? Too many organizations measure productivity, but they never measure development. And here's the irony in that. The businesses that invest in developing people usually become the businesses with the best productivity. Growth comes first. Results follow. As a leader, don't just ask, did they finish the work? Also ask, did they grow because of the work? And here's another measurement. You measure your sales, but do you measure delight? Did your customer simply complete a transaction? Or did they have an experience worth talking about? Would they recommend you? Will they come back? Would they remember how you made them feel? As I was thinking about this podcast, I thought of something. Every Sunday morning, my husband and I go to the same restaurant for breakfast. Yes, we're old people, we do the same thing every week. Sometimes it's just the two of us. Sometimes our family joins us. We don't always have the same server because obviously they rotate. But every one of them knows a little something about us. Without asking, my coffee arrives and my husband's iced tea arrives, usually before we've even ordered. We know many of their names, we know a little things about their lives, and they know a little about ours. Last week when we went, we took our grandson. A few minutes after we sat down, one of the staff members came over carrying a small stuffed animal. We thought it was just a really nice gesture. Come to find out, several of the servers had chipped in together to buy it for him. Now it wasn't expensive, it was just a small stuffed animal, but it wasn't company policy. There wasn't a KPI for stuffed animals. Nobody was tracking any of that. But let me tell you, that simple gesture created something no spreadsheet could ever measure. It created loyalty. It created a connection. It reminded us that they weren't simply serving us breakfast. They were building relationships. And isn't that what we want all of our customers to say about our business? And lastly, there's leadership consistency. This might be the most important measurement of all. How consistent are you? Do your employees know what version of you they're going to get every day? Can they trust your expectations? Do you coach consistently? Do you recognize good work consistently? Do you communicate consistently? Or does everything depend on your mood, your stress level, or how busy you are? Leadership inconsistency creates confusion. It creates anxiety. And that anxiety creates mistakes. The best leaders aren't perfect, but they are predictable. Their people know what to expect from them. That consistency creates trust. And trust creates better performance. So for this week's challenge, I'm going to encourage you to pull out your dashboard. Look at every measurement your business tracks: revenue, profit, sales, labor, productivity, and then ask yourself one simple question. What behavior does this measurement encourage? Because the metric teaches people what matters. If you only measure speed, people will rush. If you only measure sales, service will suffer. If you only measure labor cost, training often disappears. If you only measure mistakes, people will stop taking initiative. Your measurements are shaping your culture, whether you intend them to or not. What if your leadership dashboard also included questions like these? Did someone on my team grow this week? Did I coach more than I corrected? Did we create a customer experience? Someone will talk about. Was I the same leader on Friday that I was on Monday? Imagine reviewing answers to those questions every Friday afternoon. I have a feeling your answers would eventually improve too, because you'd be focused on what creates the numbers instead of simply reacting to them. Businesses will always need financial measurements. I'm certainly not suggesting we stop tracking revenue or profit, but don't confuse the scoreboard with the game. The scoreboard tells you where you've been. Leadership determines where you're going. So yes, measure your business, but also measure your people, measure your customers, and measure yourself. Because when leaders begin measuring what truly matters, the numbers usually take care of themselves. Your financial dashboard tells you how your business performed yesterday. Your leadership dashboard determines how it will perform tomorrow. You need to measure both. Now I want to leave you with one last question. If someone looked at only the things you're measuring, what would they conclude matters most in your business? Until next week, lead with confidence, focus on your people, and let's build a better business.