I didn’t use to be much of a metrics buff. Until January this year when I started the 4 Hour Body, trying to tweak my body down to 12% body-fat while bringing lean muscle levels up. As part of the experiment, I had to track a ton of stuff: body fat, weight, visceral fat, BMI, sugars, glucose and a bunch more. But more on that another time, once I actually reach 12% (I’m at 15% now).
But by far the most exciting thing that happened once I started carefully tracking KPIs for my body has been the fact I’ve become a bit of a metrics buff. A bit, to say the least. What started as a little personal experiment ended up being one of the most important aspects of my professional life: tracking, measuring, analysing and acting on business KPIs. And I’ve learned some stuff along the way, which I’d like to share with you.
First and fore most, set clear objectives. If you’re running a startup, you already have these – revenue, users, clients, funding, etcetera. What we don’t do enough, however, is define what metrics determine whether an objective is being met or not. For revenue, this means analysing the funnel and track leads, meetings, trials and contracts, sales cycle, and so on. So go ahead and make a list of what you consider key metrics. A long one. Don’t worry about the structure just yet, just start tracking. Excel works best.
Secondly, turn data into information and information into insight. Data alone is useless. No, really. Google has a boatload of data. If they didn’t have a ton of kick-ass algorithms to process it and turn it into information, all that data would be useless. The best way to do process data is to look back at the objectives and work your way down. If it takes one month to close one client and a sales person can close five leads per month, you need 10 sales people to close all the clients in a pipeline that has 50 leads. Dead simple, but if you don’t track these metrics, you’re just putting your finger in the air and hoping for the best.
Data isn’t cool, you know what’s cool? Graphs are. A long Excel spreadsheet with 1000 rows doesn’t say much. But throw a graph on top and boom, investors start getting it, your board starts smiling and you, you start sleeping well at night. I think that’s because people have very low attention spans. Including you. What better way to analyse your performance than looking at your graphs & charts, daily. If it goes up, it’s good. If it does down, not so much. Unless we’re referring to costs, doh!
Analyse, eliminate & add indicators as often as you can. In my 4 hour body experiment, I started by tracking about a dozen metrics on a daily basis and ended up tracking just four: weight, body-fat, activity and food, because I realised that these are the ones I need to track, analyse, compare and decide on in order to get maximal results. I realised, for example, that I can lose 1% of body fat in one day by doing an interval training in the morning followed by 30g of protein for breakfast and no carbs on that particular day, something I wouldn’t have known if I hadn’t tracked these core metrics carefully. But more on that another time.