It's crucial to track the right metrics in your firm so you can make informed decisions about people, processes and technology.As management guru Peter Drucker famously said, "What gets measured gets managed." But how do you decide what to measure? What type of performance data accurately depicts your firm's current state?
We delved into these questions at our recent Boomer Process Circle meeting. I'm sharing that discussion to help you develop a plan for collecting valuable metrics to move your team's performance forward and empower you with insight into tracking areas where change is necessary.
10 steps for developing firm-wide metrics for process improvement
The following steps will guide you through identifying crucial areas of performance, establishing relevant metrics and empowering you to make data-driven decisions that will catalyze process improvements across your organization.
Clarify objectives. Have a clear idea of what you want to achieve with your metrics. This can include increasing productivity, improving the client experience, developing subject matter experts or driving innovation.
Identify relevant areas. Think about the activities that support your objectives. What processes need to be measured? Which departments, teams or individuals will benefit from having up-to-date performance data?
Link to strategy. Consider the current processes of each department and how they link to your firm's overall strategic plan. This will help you identify which metrics are most relevant for measuring progress.
Get stakeholder input. Ask key stakeholders for feedback on which metrics to track and how to measure them. This could include your department managers, HR, sales, marketing or IT teams.
Prioritize actionability. Ensure that the metrics you're collecting are actionable. This means they provide insights into areas you can change or improve to move your objectives forward.
Assess data availability. Make sure you have the necessary data to measure each metric. Are there systems in place that will provide up-to-date performance insights?
Confirm key metrics. Verify the metrics you've selected by evaluating their impact on your objectives. Are they driving the right behaviors and results?
Assign responsibility. Hold individuals and teams accountable for tracking the right metrics. Who will be responsible for collecting, analyzing and reporting
Communicate and train. Ensure everyone understands the purpose, importance and value of the metrics you track.
Continuous improvement. Constantly monitor your metrics to identify areas of improvement. Use data-driven insights to refine processes and strategies over time.
By implementing a well-defined process for selecting and tracking performance metrics, you can ensure that your firm has the necessary information to make informed decisions and achieve its objectives.
Considerations for effective process metrics
While you can track plenty of metrics, not all yield valuable insights. Look beyond traditional metrics (realization, billable hours, utilization, etc.) to ensure the ones you choose reflect your process performance and help you identify areas needing help.
Alignment with industry standards. Metrics should be benchmarked against the industry average or top performers to understand how your organization stacks up.
S.M.A.R.T. criteria. Each metric should be Specific, Measurable, Achievable, Relevant and Timely.
Quantitative and qualitative balance. Metrics should include quantitative and qualitative measurements to get a complete picture of performance.
Leading and lagging indicators. Track both leading and lagging indicators to understand how performance trends over time.
Avoid information overload. Too many metrics can lead to data overload and confusion. Create a dashboard with up to five most valuable metrics and start there.
By following this process, you can identify and track the right metrics to monitor and analyze your team's overall performance.
Examples of effective process metrics
The following table provides a few examples of metrics you might consider for your firm.
By tracking the right metrics, your firm can ensure that its process improvement efforts are leading to positive results, gain invaluable insight into the performance and productivity of your teams and resources, make better decisions about people, processes and technologies and set a benchmark from which your firm can measure its progress over time. When you do that, you can position the businesses for growth and demonstrate a commitment to becoming a forward-thinking firm.
Could you benefit from structure and accountability as you strive to push your firm forward?
The Boomer Process Circle is a peer group of top process managers, project managers and change leaders in the accounting profession who share tools and resources for pushing change within their firms. Apply now to tap into the experience and expertise you need to lead the charge for continuous improvement.
As Shareholder and Chief Operating Officer for Boomer Consulting, Inc., Arianna Campbell helps accounting firms focus on the people part of change by leading process improvement initiatives that increase capacity to create more value internally and externally. Arianna is adept at blending concepts from process improvement and change leadership to drive innovation and continuous improvement.
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Arianna facilitates the development and cultivation of Process Managers, Project Managers and Change Leaders in the Boomer Process Circle.