In yesterday’s monthly practitioner meeting, we investigated new-business building metrics. To be precise: which provide a space for sharing and learning to understand what works and what doesn’t in new business building. Yesterday, we discussed the best practices in defining an effective metric system.
THREE IDEAS
Idea 1: New-business building metrics play out on three levels. In addition to obvious dimensions such as budget and revenues, metrics should also consider:
- Business-building as a whole – including anticipated value, time-to-impact, growth gap, and risk.
- The end-to-end process – pipeline balance, pipeline filling, and pipeline constipation, which measures initiatives that are not moving through the defined maturity stages despite continued funding.
- The individual corporate startup/scaleup – progress, growing scalability, leaps-of-faith, core/scaleup collaboration, and culture inside the scaleup. Key scaleup KPIs should be relevant for the Core and expressed in Core’s KPIs to foster a ‘one company mindset.’
Idea 2: Effective new-business building metrics are leading indicators, not lagging indicators. Teams should have levers to influence future outcomes, not just stats that tell them how they performed.
Idea 3: OKRs are an essential tool to achieve the autonomy/alignment piece in Scaling-Up right. To make this tool effective, the organization needs to change, and the OKRs need to relate to behavior change. You want to empower self-directed, autonomous teams, but you also need alignment to avoid any blind activism that produces outputs but not outcomes.
TWO QUOTES
“So helpful – we need another session on metrics.” (Innovation Senior Lead, Pharma)
“Thinking on three levels brings a lot of clarity.” (Director Pre-launch Validation, Automotive)
ONE QUESTION
What are your parameters for deigning effective metrics?