Business Metrics Quotes

Why was I the Most Popular President Who Ever Lived? I castrated the IRS, implemented the National Sales Tax (Fair Tax) and brought an end to parasitic government - all through the use of numbers, statistics. business metrics, graphs, pie charts, efficiency - in short - results.

Shaping the company's future requires understanding the key drivers of value for the company and establishing metrics to measure progress accordingly.

Organizational structure and management style are those two factors that we always forget to analyze when the performance of our businesses goes down.

A discontent employee means not getting the results 100% and the loss of a company advocate as well.

By focusing on a few key financial metrics, board members can transform these statements from a labyrinth into a compass, guiding them through the company's financial landscape.

Investors, creditors, and regulatory bodies rely on financial statements to make informed decisions. When internal metrics align with recognized standards, it enhances the credibility of your financial reports, fostering trust among these stakeholders.

Shaping the company's future requires understanding the key drivers of value for the company and establishing metrics to measure progress.

The board, in collaboration with management, crafts a strategic roadmap that defines the specific steps required to achieve the vision. This roadmap translates the company's "why" and "when" into a practical "how," outlining key milestones, resource allocation, and performance metrics.

Diversification across success metrics acts as a hedge against unforeseen risks.

If the company is going to thrive financially, then the board must understand the relationship between different financial metrics and how they impact overall financial performance.

Business is supposed to be fun. We're supposed to love what we're doing. Don't let these old folks convince you that business is about spreadsheets and MBA's and metics and all that stuff. That's all good, but ultimately business is just about adding value to other peoples lives and getting them to pay you for it.

Business is supposed to be fun. We're supposed to love what we're doing. Don't let these old folks convince you that business is about spreadsheets and MBA's and metrics and all that stuff. That's all good, but ultimately business is just about adding value to other peoples lives and getting them to pay you for it.

Profitability metrics are the lifeblood of any business. They reveal the company's ability to generate profit, a fundamental indicator of its success and sustainability.

By monitoring liquidity metrics, board members can ensure the company has sufficient cash on hand to pay its bills, meet payroll, and invest in growth opportunities.

My advice was to start a policy of making reversible decisions before anyone left the meeting or the office. In a startup, it doesn’t matter if you’re 100 percent right 100 percent of the time. What matters is having forward momentum and a tight fact-based data/metrics feedback loop to help you quickly recognize and reverse any incorrect decisions. That’s why startups are agile. By the time a big company gets the committee to organize the subcommittee to pick a meeting date, your startup could have made 20 decisions, reversed five of them and implemented the fifteen that worked.

For a long time it had seemed to me that life was about to begin—real life. But there was always some obstacle in the way. Something to be got through first, some unfinished business, time still to be served, a debt to be paid. Then life would begin. At last it dawned on me that these obstacles were my life. —FR. ALFRED D’SOUZA

life can be organized like a business plan. First you take an inventory of your gifts and passions. Then you set goals and come up with some metrics to organize your progress toward those goals. Then you map out a strategy to achieve your purpose, which will help you distinguish those things that move you toward your goals from those things that seem urgent but are really just distractions. If you define a realistic purpose early on and execute your strategy flexibly, you will wind up leading a purposeful life. You will have achieved self-determination, of the sort captured in the oft-quoted lines from William Ernest Henley’s poem “Invictus”: “I am the master of my fate / I am the captain of my soul.

Profit serves as a metric of efficiency and effectiveness, indicating that a company is utilizing its resources responsibly and creating value for all its stakeholders while minimizing its negative impact.

Whenever we look around the world, we see smart leaders – in politics, in business, in media – making terrible decisions. What they're lacking is not IQ, but wisdom. Which is no surprise; it has never been harder to tap into our inner wisdom, because in order to do so, we have to disconnect from all our omnipresent devices – our gadgets, our screens, our social media – and reconnect with ourselves.

The Six Steps to Success: 1) Define Success 2) Devise a Plan 3) Execute and Overcome Adversity 4) Measure Results with Key Metrics 5) Revise the Plan 6) Work Hard

It's crucial for companies to identify the specific regulatory bodies that apply to their business and ensure their internal financial metrics align with the relevant reporting standards.

ESG is more than a suite of metrics and statistical measurements. ESG begins with the habits, purchasing decisions, business choices, and lifestyles of individuals and groups of individuals.

The people we invite on the train are those with whom we are prepared to be vulnerable and real, with whom there is no room for masks and games. They strengthen us when we falter and remind us of the journey’s purpose when we become distracted by the scenery. And we do the same for them. Never let life’s Iagos—flatterers, dissemblers—onto your train. We always get warnings from our heart and our intuition when they appear, but we are often too busy to notice. When you realize they’ve made it on board, make sure you usher them off the train; and as soon as you can, forgive them and forget them. There is nothing more draining than holding grudges.

As business leaders we need to understand that lack of data is not the issue. Most businesses have more than enough data to use constructively; we just don't know how to use it. The reality is that most businesses are already data rich, but insight poor.

Benchmarking is a key component of performing exceptionally well on ESG metrics.

just as Soviet managers responded by producing shoddy goods that met the numerical targets set by their overlords, so do schools, police forces, and businesses find ways of fulfilling quotas with shoddy goods of their own:

In natural ecosystems, the efficient allocation of capital is a prerequisite for all other success metrics. The same is true of economic systems. The efficient allocation of capital is a prerequisite for all other success metrics.

I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product.

Performance metrics are numbers in context, results related to the strategic goals of the business.

Vanity metrics wreak havoc because they prey on a weakness of the human mind.

An old saying goes, “The faintest ink is better than the sharpest memory.” But that’s not true if you never go back to read what you wrote.

You need to know which aspects of your business are too risky and then work to improve the metric that represents that risk.

In a nutshell, Blue Ocean Strategy is about creating completely new industries through fundamental differentiation as opposed to competing in existing industries by tweaking established models. Rather than outdoing competitors in terms of traditional performance metrics, Kim and Mauborgne advocate creating new, uncontested market space through what the authors call value innovation.

To get products approved, firms had to create applications to prove that medicines were ‘”safe and effective”, meaning more effective than doing nothing at all. That standard was never refined to include the more modern question: Is the product more effective than the dozens of other treatments for a particular conditions that are already on the market? Equally important, the FDA yardstick for approval did not include any consideration of price of cost-effectiveness – a metric that virtually all other countries now use as they consider admitting new drugs to their formula.

Cash flow analysis helps lenders assess a business's ability to generate sufficient cash to meet debt obligations. In terms of managing your business’s money, free cash flow is a good metric to keep front and center.

In 2009, the Bill & Melinda Gates Foundation launched a massive project to study 3,000 teachers in seven cities and learn what made them effective. The five metrics that most correlated with student learning were: 1. Students in this class treat the teacher with respect. 2. My classmates behave the way my teacher wants them to. 3. Our class stays busy and doesn’t waste time. 4. In this class, we learn a lot almost every day. 5. In this class, we learn to correct our mistakes.

However, simplicity is a virtue when developing metrics for your platform business. Overcomplex metrics make management less effective by introducing noise, discouraging frequent analysis, and distracting from the handful of data points that are most significant.

A more recent concern relates to “financialization” and associated short-termism. Financialization is the growing importance of norms, metrics, and incentives from the financial sector to the wider economy. Some of the concerns expressed are that, for example, managers are increasingly awarded stock options to align their incentives with those of shareholders; companies are often explicitly managed to increase short-term shareholder value; and financial engineering, such as share buybacks and earnings management, has become a more important part of senior managers’ jobs. The end result is that rather than finance serving business, business serves finance: the tail wags the dog. What John Kay described as “obliquity,” the idea that making money was a consequence of, or a second-order benefit of, serving one’s customers and building good businesses, is driven out (Kay 2010).

If You Only Track Five Metrics… Track as many of these as you can in your sales force automation system’s dashboards: New leads created per month (also, from what source). Conversion rate of leads to opportunities. Number of, and pipeline dollar value of, qualified opportunities created per month. This is the most important leading indicator of revenue! Conversion rates of opportunities to closed deals. Booked revenues in three categories: New Business, Add-On Business, Renewal Business.

When designing for digital mediums, it’s easy to become detached from how design decisions affect the end user. The word “user” itself can be a vehicle for that detachment. When the “user” doesn’t have a face and a name, it becomes a formless concept, blending in with other quantitative metrics and taking on any assumed needs to justify business decisions. It quickly becomes a number on a crowded dashboard, and its reaction to the product is just another metric to consider in an effort to increase revenue.

On the pathless path, the goal is not to find a job, make money, build a business, or achieve any other metric. It’s to actively and consciously search for the work that you want to keep doing. This is one of the most important secrets of the pathless path. With this approach, it doesn’t make sense to chase any financial opportunity if you can’t be sure that you will like the work. What does make sense is experimenting with different kinds of work, and once you find something worth doing, working backward to build a life around being able to keep doing it.

To get products approved, firms had to create applications to prove that medicines were "safe and effective”, meaning more effective than doing nothing at all. That standard was never refined to include the more modern question: Is the product more effective than the dozens of other treatments for a particular conditions that are already on the market? Equally important, the FDA yardstick for approval did not include any consideration of price of cost-effectiveness – a metric that virtually all other countries now use as they consider admitting new drugs to their formula.

Metrics, and especially averages, encourage you to focus on the middle of a market, but innovation happens at the extremes. You are more likely to come up with a good idea focusing on one outlier than on ten average users. We were discussing this recently in a meeting when a round of sandwiches arrived. ‘This proves my point exactly,’ I said, pointing at the food. The sandwich was not invented by an average eater. The Earl of Sandwich was an obsessive gambler, and demanded food in a form that would not require him to leave the card table while he ate. Weird consumers drive more innovation than normal ones. By contrast, it is perfectly possible that conventional market research has, over the past fifty years, killed more good ideas than it has spawned, by obsessing with a false idea of representativeness.

From every direction, the place is under assault—and unlike in the past, the adversary is not concentrated in a single force, such as the Bureau of Reclamation, but takes the form of separate outfits conducting smaller attacks that are, in many ways, far more insidious. From directly above, the air-tour industry has succeeded in scuttling all efforts to dial it back, most recently through the intervention of Arizona’s senators, John Kyl and John McCain, and is continuing to destroy one of the canyon’s greatest treasures, which is its silence. From the east has come a dramatic increase in uranium-mining claims, while the once remote and untrammeled country of the North Rim now suffers from an ever-growing influx of recreational ATVs. On the South Rim, an Italian real estate company recently secured approval for a massive development whose water demands are all but guaranteed to compromise many of the canyon’s springs, along with the oases that they nourish. Worst of all, the Navajo tribe is currently planning to cooperate in constructing a monstrous tramway to the bottom of the canyon, complete with a restaurant and a resort, at the confluence of the Little Colorado and the Colorado, the very spot where John Wesley Powell made his famous journal entry in the summer of 1869 about venturing “down the Great Unknown.” As vexing as all these things are, what Litton finds even more disheartening is the country’s failure to rally to the canyon’s defense—or for that matter, to the defense of its other imperiled natural wonders. The movement that he and David Brower helped build is not only in retreat but finds itself the target of bottomless contempt. On talk radio and cable TV, environmentalists are derided as “wackos” and “extremists.” The country has swung decisively toward something smaller and more selfish than what it once was, and in addition to ushering in a disdain for the notion that wilderness might have a value that extends beyond the metrics of economics or business, much of the nation ignorantly embraces the benefits of engineering and technology while simultaneously rejecting basic science.

A good metric is a ratio or a rate. Accountants and financial analysts have several ratios they look at to understand, at a glance, the fundamental health of a company. You need some, too. There are several reasons ratios tend to be the best metrics: • Ratios are easier to act on. Think about driving a car. Distance traveled is informational. But speed—distance per hour—is something you can act on, because it tells you about your current state, and whether you need to go faster or slower to get to your destination on time. • Ratios are inherently comparative. If you compare a daily metric to the same metric over a month, you’ll see whether you’re looking at a sudden spike or a long-term trend. In a car, speed is one metric, but speed right now over average speed this hour shows you a lot about whether you’re accelerating or slowing down. • Ratios are also good for comparing factors that are somehow opposed, or for which there’s an inherent tension. In a car, this might be distance covered divided by traffic tickets. The faster you drive, the more distance you cover—but the more tickets you get. This ratio might suggest whether or not you should be breaking the speed limit.

These include: the Bar Raiser hiring process that ensures that the company continues to acquire top talent; a bias for separable teams run by leaders with a singular focus that optimizes for speed of delivery and innovation; the use of written narratives instead of slide decks to ensure that deep understanding of complex issues drives well-informed decisions; a relentless focus on input metrics to ensure that teams work on activities that propel the business. And finally there is the product development process that gives this book its name: working backwards from the desired customer experience. Many of the business problems that Amazon faces are no different from those faced by every other company, small or large. The difference is how Amazon keeps coming up with uniquely Amazonian solutions to those problems. Taken together, these elements combine to form a way of thinking, managing, and working that we refer to as being Amazonian, a term that we coined for the purposes of this book. Both of us, Colin and Bill, were “in the room,” and—along with other senior leaders—we shaped and refined what it means to be Amazonian. We both worked extensively with Jeff and were actively involved in creating a number of Amazon’s most enduring successes (not to mention some of its notable flops) in what was the most invigorating professional experience of our lives.

True understanding is to see the events of life in this way: “You are here for my benefit, though rumor paints you otherwise.” And everything is turned to one’s advantage when he greets a situation like this: You are the very thing I was looking for. Truly whatever arises in life is the right material to bring about your growth and the growth of those around you. This, in a word, is art—and this art called “life” is a practice suitable to both men and gods. Everything contains some special purpose and a hidden blessing; what then could be strange or arduous when all of life is here to greet you like an old and faithful friend? I had a dream many years ago that sums up this thought in a different way, one that has become a sustaining metaphor for me. I am on a train going home to God. (Bear with me!) It’s a long journey, and everything that happens in my life is scenery along the way. Some of it is beautiful; I want to linger over it awhile, perhaps hold on to it or even try to take it with me. Other parts of the journey are spent grinding through a barren, ugly countryside. Either way the train moves on. And pain comes whenever I cling to the scenery, beautiful or ugly, rather than accept that all the scenery is grist for the mill, containing, as Marcus Aurelius counseled us, some hidden purpose and a hidden blessing. My family, of course, is on board with me. Beyond our families, we choose who is on the train with us, who we share our journey with. The people we invite on the train are those with whom we are prepared to be vulnerable and real, with whom there is no room for masks and games. They strengthen us when we falter and remind us of the journey’s purpose when we become distracted by the scenery. And we do the same for them. Never let life’s Iagos—flatterers, dissemblers—onto your train. We always get warnings from our heart and our intuition when they appear, but we are often too busy to notice. When you realize they’ve made it on board, make sure you usher them off the train; and as soon as you can, forgive them and forget them. There is nothing more draining than holding grudges.

Was this luck, or was it more than that? Proving skill is difficult in venture investing because, as we have seen, it hinges on subjective judgment calls rather than objective or quantifiable metrics. If a distressed-debt hedge fund hires analysts and lawyers to scrutinize a bankrupt firm, it can learn precisely which bond is backed by which piece of collateral, and it can foresee how the bankruptcy judge is likely to rule; its profits are not lucky. Likewise, if an algorithmic hedge fund hires astrophysicists to look for patterns in markets, it may discover statistical signals that are reliably profitable. But when Perkins backed Tandem and Genentech, or when Valentine backed Atari, they could not muster the same certainty. They were investing in human founders with human combinations of brilliance and weakness. They were dealing with products and manufacturing processes that were untested and complex; they faced competitors whose behaviors could not be forecast; they were investing over long horizons. In consequence, quantifiable risks were multiplied by unquantifiable uncertainties; there were known unknowns and unknown unknowns; the bracing unpredictability of life could not be masked by neat financial models. Of course, in this environment, luck played its part. Kleiner Perkins lost money on six of the fourteen investments in its first fund. Its methods were not as fail-safe as Tandem’s computers. But Perkins and Valentine were not merely lucky. Just as Arthur Rock embraced methods and attitudes that put him ahead of ARD and the Small Business Investment Companies in the 1960s, so the leading figures of the 1970s had an edge over their competitors. Perkins and Valentine had been managers at leading Valley companies; they knew how to be hands-on; and their contributions to the success of their portfolio companies were obvious. It was Perkins who brought in the early consultants to eliminate the white-hot risks at Tandem, and Perkins who pressed Swanson to contract Genentech’s research out to existing laboratories. Similarly, it was Valentine who drove Atari to focus on Home Pong and to ally itself with Sears, and Valentine who arranged for Warner Communications to buy the company. Early risk elimination plus stage-by-stage financing worked wonders for all three companies. Skeptical observers have sometimes asked whether venture capitalists create innovation or whether they merely show up for it. In the case of Don Valentine and Tom Perkins, there was not much passive showing up. By force of character and intellect, they stamped their will on their portfolio companies.

For all of the information on the hazards of time on screen, research by Veerman and colleagues (2012) might be the most metric.  They found that people whose life pattern includes watching TV 6 hours a day can expect to survive 4.8 years less than people that do not watch TV. They reckon that “every single hour of TV viewed after the age of 25 reduces the viewer’s life expectancy by 21.8 minutes! They conclude that time viewing TV may be comparable to other major chronic disease factors such as obesity and inactivity in risk of loss of life. Of course, this was research done down under in Australia.  All things considered, that might leave Americans at even greater risk for lifespans shortened by time on screen.

For the purpose of this discussion, it is useful to think about technology acquisitions in three categories: 1. Talent and/or technology, when a company is acquired purely for its technology and/or its people. These kinds of deals typically range between $5 million and $50 million. 2. Product, when a company is acquired for its product, but not its business. The acquirer plans to sell the product roughly as it is, but will do so primarily with its own sales and marketing capability. These kinds of deals typically range between $25 million and $250 million. 3. Business, when a company is acquired for its actual business (revenue and earnings). The acquirer values the entire operation (product, sales, and marketing), not just the people, technology, or products. These deals are typically valued (at least in part) by their financial metrics and can be extremely large (such as Microsoft’s $30 billion–plus offer for Yahoo).

Interestingly, I see this same problem play out in many consumer Internet startups. I often see teams that maniacally focus on their metrics around customer acquisition and retention. This usually works well for customer acquisition, but not so well for retention. Why? For many products, metrics often describe the customer acquisition goal in enough detail to provide sufficient management guidance. In contrast, the metrics for customer retention do not provide enough color to be a complete management tool. As a result, many young companies overemphasize retention metrics and do not spend enough time going deep enough on the actual user experience. This generally results in a frantic numbers chase that does not end in a great product. It’s important to supplement a great product vision with a strong discipline around the metrics, but if you substitute metrics for product vision, you will not get what you want.

A company’s revenue engine is a critical success factor. I had seen from my own direct experience how easy it was to get caught in silos: marketing people would just think of marketing, salespeople would just think of sales, and accounting wouldn’t think of itself as part of the revenue engine at all. Furthermore, product and the revenue engine were too often thought of completely independent of each other. The need for a more integrated approach was on my mind from the beginning. The revenue engine is a whole system. It encompasses a diverse set of integrated components, each doing its part to advance the system’s purpose. The engine is not just comprised of marketing and sales— it includes product, accounting, and the underlying technology and data infrastructure required to keep everything flowing. It involves people, tools, workflow, and metrics. Its purpose is to optimize reach, conversion, and expansion of customer spend. I call my revenue engine model “the bowtie schema.” It was the product of continuous iteration. As I interacted with marketing and sales practitioners and waded through the research, the model slowly emerged. The final model conveys not just the product and customer journey across the bowtie, but also the foundational layers that support that journey-- the interaction between people tools, workflow, and metrics that make it all happen. The most basic question a CEO must answer is whether the product has achieved a value breakthrough. Without that, the revenue engine is irrelevant. Once product-market fit is confirmed, the next step is to clearly identify your ideal customer profile (ICP) and your business model. This includes the lifetime value (LTV) profile of your company. Assuming a strong product, a clear ICP, and a solid understanding of the constraints composed by your unit economics, the path forward is clear. Then, the focus will turn to uplifting the maturity of your revenue engine and scaling it efficiently.

I call my revenue engine model “the bowtie schema.” It was the product of continuous iteration. As I interacted with marketing and sales practitioners and waded through the research, the model slowly emerged. The final model conveys not just the product and customer journey across the bowtie, but also the foundational layers that support that journey-- the interaction between people tools, workflow, and metrics that make it all happen.

Managing digital performance and improving business achievement as an iterative continuum means setting metrics, adjusting plans, measuring performance, and understanding results dynamically.

The revenue engine is a whole system. It encompasses a diverse set of integrated components, each doing its part to advance the system’s purpose. The engine is not just comprised of marketing and sales— it includes product, accounting, and the underlying technology and data infrastructure required to keep everything flowing. It involves people, tools, workflow, and metrics. Its purpose is to optimize reach, conversion, and expansion of customer spend.

In the end, there is no silver bullet, no substitute for actually knowing one's subject and one's organization, which is partly a matter of experience and partly a matter of unquantifiable skill. Many matters of importance are too subject to judgement and interpretation to be solved by standardized metrics. Ultimately, the issue is not one of metrics versus judgment, but metrics as informing judgement, which includes knowing how much weight to give to metrics, recognizing their characteristic distortions, and appreciating what can't be measured. In recent decades, too many politicians, business leaders, policymakers, and academic officials have lost sight of that.

In everyone's CV, It does not show how many attempts they have tried and failed at something, but it only mention when they have succeeded. It does not say how many attempts they did before getting their drivers license, metric certificate, Degree, PHD, Album, Business, or breakthrough. If you have failed at something now, don't give up. Try again and again until you get it right, because that is the only time it will be worth mentioning and it will count.

If You Only Track Five Metrics…

With Chartbeat, no longer would editors have to wait until readers were logged off to learn which content had won them over and which had missed its targets. Chartbeat told editors how many people were on their site at any given second, and which stories they were reading. It offered a digital dashboard that distilled a site’s traffic data into three metrics: “Concurrents,” “Recirculation,” and “Engaged Time.

Prakash and Baron previewed another new metrics tool called Loxodo. It was a giant metrics board that allowed journalists to see, in more or less real time, how their versions of stories compared with the same ones done by competitors.

Here’s the real irony: The human side of medicine—the compassion, communication, and empathy that lie at the heart of the art of medicine—is essential to achieving the outcomes that matter most to the business and science sides of medicine. Within health care, there has been an unyielding assumption embedded in both the protocols of science and the metrics of business: that patients will comply with what their doctors ask them to do. This is why balance matters: Study after study has shown that when the art of medicine disappears, there’s a significant and negative impact on health. When patients don’t feel valued and heard as human beings, their overall sense of well-being and willingness to trust the system will suffer. And then they’re much less likely to follow the steps that can help them manage their diabetes, lose weight, or deal with whatever their specific health challenge may be. If patients don’t feel a connection to their doctors when problems come up, they are less likely to seek help until those problems become much worse and more expensive. In other words, in losing the art of medicine, we’re sabotaging the broader goals we hold for America’s health-care system.

I’ve argued that the good data that effective metrics provide are essential to advancing the science at the heart of evidence-based medicine. But I’ve also argued that not all metrics or standards are created equal, and we should not equate metric-tracking with trust-building, because to do so misses a crucial point: What looks good on paper and what drives the best outcomes in practice can be two very different things. Too often, what looks good on paper is what is possible to measure, not necessarily what is actually the best approach to caring for patients. And when we consider the costs of abiding by and tracking and reporting all of these metrics—the four hours of physician time, the eight hours of care team time, the $8 billion we spend as a nation every year—it’s pretty clear that we’re interfering with those best, relationship-building approaches. Instead of spending so much more of our national time, resources, and attention in medicine on creating artificial metrics designed to incentivize good physician and provider behavior while unwittingly reinforcing bad behavior, let’s give the art of medicine the room it needs to build trusting relationships in the way that the best doctors and medical practices have always done so: honestly, naturally, compassionately, and with the best outcomes for the patient squarely in mind.

The metrics in which Narisetti was so conversant were available from a company called Chartbeat, which had established itself as a powerful force in America’s data-focused newsrooms. As Nielsen measured TV ratings, Chartbeat measured internet traffic,

The art of medicine is being crowded out by the science of medicine—and its emphasis on evidence-based procedures, well-meaning protocols, and advances in Big-Health-Data-churning information technology. And it’s being squeezed out by the business of medicine—and its focus on time-consuming but questionable quality metrics, endless billing procedures, and an adherence to process that doesn’t necessarily put patients first. Put another way, the science and business of medicine have combined with a superficial focus on things like hospital gowns to essentially act like a Quentin Tarantino character going “medieval” on the art of medicine. But perhaps I understate.

Each ran a highly decentralized organization; made at least one very large acquisition; developed unusual, cash flow–based metrics; and bought back a significant amount of stock. None paid meaningful dividends or provided Wall Street guidance. All received the same combination of derision, wonder, and skepticism from their peers and the business press. All also enjoyed eye-popping, credulity-straining performance over very long tenures (twenty-plus years on average).

As I introduce the concept of trust and transparency, you will become aware that it is a necessary ingredient in business growth and survival. No longer can we afford to determine if we should invest in it. Instead, we have reached a critical point where we must decide when we are going to make the investment.

IT metrics need to evolve to something that matters to the business audience; at the same time that “business sentiment” needs to get put into something more tangible.

Ultimately, the CCO is accountable for increasing the profitability of the firm’s customers, as measured by metrics such as customer lifetime value (CLV) and customer equity as well as by intermediate indicators, such as word of mouth (or mouse). Customer

We recommend companies with new business models be patient for growth (to allow the market opportunity to unfold) but impatient for profit (as an early validation that the model works). A profitable business is the best early indication of a viable model. What Rules, Norms, and Metrics Are Standing in Your Way? In

There’s another familiar lesson in this graph: output metrics—the data we graphed above—are far poorer indicators of trend causes than input metrics. It turned out in this case that the cause of our decelerating growth was a reduction in the rate of acquiring new customers—but nothing in these graphs gives any clue to that cause. With a sizable existing business, if you only pay attention to the output metric “revenue,” you typically won’t see the effects of new customer deceleration for quite some time. However, if you look at input metrics instead—things like “new customers,” “new customer revenue,” and “existing customer revenue”—you will detect the signal much earlier, and with a much clearer call to action.

Our research supported what we came to call “Packard’s Law” (named in admiration after HP’s co-founder): No company can consistently grow faster than its ability to get enough of the right people and still become a great company. If a company consistently grows faster than its ability to get enough of the right people, it will not simply stagnate, it will fall. The number one metric to track isn’t revenue or profit or return on capital or cash flow; the number one metric is the percentage of key seats on the bus that are filled with right people for those seats. Everything depends on having the right people.

Defining the basics of the culture, articulating leadership principles, regularizing essential practices—Bar Raiser hiring, teams with single-threaded leaders, written narratives, Working Backwards, focusing on input metrics—all these things have proved to be essential to us in other endeavors. Indeed, we can’t imagine doing business without them.

Think Human. Unless you’re in the business of sterilizing things, business is no place to be sterile. Have the boldness to look beyond numbers and spreadsheets and allow your heart to have a say in the matter. Bear in mind that the intangibles are every bit as real as the metrics—oftentimes even more important. The simplest way—and most effective way—to connect with human beings is to speak with a human voice. It may be necessary in your business to market to specific target groups, but bear in mind that every target is a human being, and human beings respond to Simplicity. Best advice: Just be true to your species.

Google's John Mueller answers question about quantifying site quality and mentions having inquired about a Search Console Quality Metric Can Site Quality Be Quantified In Search Console? Google’s John Mueller was asked about whether search quality is quantifiable, meaning something that could be measured and expressed as a metric. John Mueller’s answer was surprising because he indicated having looked into a search console quality metric to help publishers. What Is Site Quality? The idea of site quality seems deceptively simple but it’s not. John Mueller and many others talk about the importance of site quality for indexing and ranking but what it actually means at Google is a mystery so we’re stuck with our own subjective ideas. Screenshot of John Mueller Discussing Site Quality Google's John Mueller discussing site quality The concept of “site quality” is a subjective concept that depends on the opinions of individuals, opinions that are influenced by their wildly varied levels of experience and knowledge. ADVERTISEMENT CONTINUE READING BELOW There is no absolute and objective way to express what Site Quality is. Every person is literally blind to what “quality” actually means for Google because Google doesn’t say what the height, width, and depth of their definition of site quality is. And it could be, as the person asking the question implies, there is no way to quantify what multiple algorithms are independently verifying. The person asking the question, quite reasonably, was looking for something more objective and quantifiable. The question: “When you say improve the quality of your website is this quality something that is quantifiable? Or is it simply a term used to determine how multiple algorithms look at your website?

To work less and make more, all you need to do is move the needle on one metric: Effective Hourly Rate (EHR). Here’s how to calculate your EHR: Take the amount of revenue you make in a month and subtract your costs. What you have left is your monthly profit. (If you have a job, then your wage is your profit.) Divide your profit by the number of hours you worked in the month to get it. The number you have now is your EHR. Let’s say you make $20,000 a month in revenue, and your fixed and variable costs come to $15,000. That means your profit will be $5,000. If you work 250 hours a month to achieve that profit then: $5,000/250 = EHR $20/hour

A business outcome measures how well the business is progressing. A product outcome measures how well the product is moving the business forward. A traction metric measures usage of a specific feature or workflow in the product.

Under a stakeholder economic model, businesses are not rewarded primarily based on economic metrics such as profit, loss, customer satisfaction, or the quality of a company’s products and services. Instead, businesses are rated based on their commitment to social and environmental causes chosen by the elites themselves, often to their own benefit.

normally and performance is not degrading over time. As your fundamental understanding of what drives the business improves, it’s common for the WBR to become an exception-based meeting rather than a regular one for discussing each and every metric.

The WBR is an important embodiment of how metrics are put into action at Amazon, but it isn’t the only one. Metrics dashboards and reports are established by every engineering, operations, and business unit at the company. In many cases metrics are monitored in real time, and each critical technical and operational service receives an “alarm” to ensure that failures and outages are identified instantly. In other cases, teams rely on dashboards that are updated hourly or daily for their metrics.

Our third-quarter financial results released on October 21, 2004, showed that sales had grown by 29 percent year over year. Free cash flow had increased by 76 percent. Many corporations would look at such growth figures with envy, but a closer look at our financials at the time revealed a more concerning picture. Throughout 2004, Amazon sales had continued to grow, but the rate of growth decreased from the prior year, across all lines of business. The output metric of sales revenue was not growing as fast as we wanted.

The Amazon Deliver Results leadership principle states, “Leaders focus on the key inputs for their business and deliver them with the right quality and in a timely fashion. Despite setbacks, they rise to the occasion and never settle.” Shipping speed is a key input metric for Amazon. So, if you are customer obsessed, then you’re also obsessed with measuring and improving the shipping experience for customers.

From the very first deals we did at EGI, I have spread the opportunity—both the risks and the rewards. We co-invest, side by side, and I often provide a “promote” to my people, allowing them to share in profits on a portion of my invested capital. That means I put my money behind theirs (say $150,000 of my money to $30,000 of their money), and if our investments or funds achieve their minimum target metrics, my people get returns based on the aggregate ($180,000). In effect, we’re all invested in each other’s success. It’s not only about motivation; it’s a mandate to collaborate. Deal opportunities and challenges are discussed, questioned, and probed by the team at large because everybody has a piece of everybody else’s deal.

When the retail, operations, and finance teams began to construct the initial Amazon WBR, they turned to a well-known Six Sigma process improvement method called DMAIC, an acronym for Define-Measure-Analyze-Improve-Control.1 Should you decide to implement a Weekly Business Review for your business, we recommend following the DMAIC steps as well. The order of the steps matters. Progressing through this metrics life cycle in this order can prevent a lot of frustration and rework, allowing you to achieve your goals faster.

Understanding and tracking 10 most crucial google analytics metrics Google Analytics proves to be an invaluable asset for businesses of varying sizes, offering comprehensive analysis capabilities. It empowers users to gain insights into their content, websites, and incoming traffic, thereby aiding in the enhancement of overall strategy and campaign planning. It is imperative to familiarize oneself with Google Analytics before engaging in practical application. Obtaining a Google Analytics certification serves as an excellent introductory step, and it is worth noting that this certification is available for free. By incorporating Google Analytics into your digital marketing toolkit, you can significantly bolster your online marketing endeavors. For more information on analytics metrics, Google Analytics certification, and measurement, please refer to the accompanying blog.

In tough times, however, we’re praised for staying at our desks and burning the midnight oil. How are you supposed to see the horizon with your nose pressed against the grindstone? Thanks in large part to the factory mentality of modern workplace culture, organizations discourage the very behaviors that can save them.

So much advice around innovation and creativity amounts to more: more methods, more habits, more techniques. If we don’t simultaneously carve away less important uses of our time to create space for reflection and contemplation—distance from the problem at hand—we only undermine the effort to boost ideaflow. Caught up in the day-to-day, our imaginations become blocked, just as David Ogilvy warned at the top of this chapter. To escape “the tyranny of reason,” we must be as tactical about withdrawing from a losing battle as we are about gathering divergent inputs or vigorously testing our ideas. The “Father of Advertising” was an ace at the mental game of creative output. He intuitively understood that generating more ideas required doing a little less.

The majority of business men are incapable of original thinking because they are unable to escape from the tyranny of reason. Their imaginations are blocked. —DAVID OGILVY

One thing that makes it difficult to use outcomes inside larger organizations is that they’re almost never organized around achieving outcomes. Instead they’re organized around making stuff.

He laid out the defining characteristics, workflow, and management as follows. A two-pizza team will: Be small. No more than ten people. Be autonomous. They should have no need to coordinate with other teams to get their work done. With the new service-based software architecture in place, any team could simply refer to the published application programming interfaces (APIs) for other teams. (More on this new software architecture to follow.) Be evaluated by a well-defined “fitness function.” This is the sum of a weighted series of metrics. Example: a team that is in charge of adding selection in a product category might be evaluated on: a)  how many new distinct items were added for the period (50 percent weighting) b)  how many units of those new distinct items were sold (30 percent weighting) c)  how many page views those distinct items received (20 percent weighting) Be monitored in real time. A team’s real-time score on its fitness function would be displayed on a dashboard next to all the other two-pizza teams’ scores. Be the business owner. The team will own and be responsible for all aspects of its area of focus, including design, technology, and business results. This paradigm shift eliminates the all-too-often heard excuses such as, “We built what the business folks asked us to, they just asked for the wrong product,” or “If the tech team had actually delivered what we asked for and did it on time, we would have hit our numbers.” Be led by a multidisciplined top-flight leader. The leader must have deep technical expertise, know how to hire world-class software engineers and product managers, and possess excellent business judgment. Be self-funding. The team’s work will pay for itself. Be approved in advance by the S-Team. The S-Team must approve the formation of every two-pizza team.

Our business owners own metrics and are prepared to explain variances

Structure from Content Lesson #1: There must be an individual or, better, a set of individuals with relevant ethical, legal, and business expertise, who determine which, if any, of the mathematical metrics of fairness are appropriate for the particular use case.

There is certain work that cannot be done well and cannot be done poorly. It can only be done or undone. There is no success metric for a job that simply keeps me busy, so I ignore her empty praise.

Charles Koch loved the idea, and so did Markel. Getting rid of budgets would instantly dispose of hours’ worth of drudgery that defined a financial controller’s life. Koch invented a new set of metrics to replace budgets. And the numbers that the company focused upon were telling. Charles Koch didn’t care much about sales or costs—he cared about profits. He wanted to know how profitable any line of business was and how profitable it could be under the right management. He steered all of his managers to think this way. The key thing they needed to focus on was the return on investment, or ROI—what was the best use of Koch Industries’ money? Soon each division was writing a profit goal for the quarter, rather than a budget.

The key metric that Tyson uses to pick winners and losers is how much feed it takes a farmer for his chickens to gain one pound of meat, a neat little number the company calls its “feed conversion.

Through Carson’s career, he bid on cattle using one simple number, a metric he called “choice cost hanging in the cooler.” What that metric represented was the value for a pound of “choice”-grade beef hanging in the cooler at a slaughterhouse. Choice-grade beef was the high-quality stuff. It’s what made a good steak. That’s what beef packers were aiming to get because that’s what fetched the highest price. Select-grade beef, on the other hand, went into hamburger or other cheaper cuts. In the old days, Carson figured out the choice cost hanging in the cooler and reverse-engineered that number to figure out what he would bid on any given pen of cattle. He could eyeball a pen of cattle and figure out instantly how many of them would grade choice, how many select, and how much meat they’d yield. It let him bid prices that were razor-sharp in their precision. This was at the heart of Carson’s job, and the job of every cattle buyer. Now Klein was telling Carson that it only mattered how his costs stacked up against those of a buyer several counties away.

The country has swung decisively toward something smaller and more selfish than what it once was, and in addition to ushering in a disdain for the notion that wilderness might have a value that extends beyond the metrics of economics or business, much of the nation ignorantly embraces the benefits of engineering and technology while simultaneously rejecting basic science.

Excellence in Statistics: Rigor Statisticians are specialists in coming to conclusions beyond your data safely—they are your best protection against fooling yourself in an uncertain world. To them, inferring something sloppily is a greater sin than leaving your mind a blank slate, so expect a good statistician to put the brakes on your exuberance. They care deeply about whether the methods applied are right for the problem and they agonize over which inferences are valid from the information at hand. The result? A perspective that helps leaders make important decisions in a risk-controlled manner. In other words, they use data to minimize the chance that you’ll come to an unwise conclusion. Excellence in Machine Learning: Performance You might be an applied machine-learning/AI engineer if your response to “I bet you couldn’t build a model that passes testing at 99.99999% accuracy” is “Watch me.” With the coding chops to build both prototypes and production systems that work and the stubborn resilience to fail every hour for several years if that’s what it takes, machine-learning specialists know that they won’t find the perfect solution in a textbook. Instead, they’ll be engaged in a marathon of trial and error. Having great intuition for how long it’ll take them to try each new option is a huge plus and is more valuable than an intimate knowledge of how the algorithms work (though it’s nice to have both). Performance means more than clearing a metric—it also means reliable, scalable, and easy-to-maintain models that perform well in production. Engineering excellence is a must. The result? A system that automates a tricky task well enough to pass your statistician’s strict testing bar and deliver the audacious performance a business leader demands. Wide Versus Deep What the previous two roles have in common is that they both provide high-effort solutions to specific problems. If the problems they tackle aren’t worth solving, you end up wasting their time and your money. A frequent lament among business leaders is, “Our data science group is useless.” And the problem usually lies in an absence of analytics expertise. Statisticians and machine-learning engineers are narrow-and-deep workers—the shape of a rabbit hole, incidentally—so it’s really important to point them at problems that deserve the effort. If your experts are carefully solving the wrong problems, your investment in data science will suffer low returns. To ensure that you can make good use of narrow-and-deep experts, you either need to be sure you already have the right problem or you need a wide-and-shallow approach to finding one.

Now that computers can write and design ads, we can get down to the real business of advertising -- you know, meetings and downloads and uploads and briefings and off-sites and Powerpoints and metrics and brand audits and deep dives. We

Think about the metric by which your life will be judged, and make a resolution to live every day so that in the end, your life will be judged a success. Originally

Lots of IT organizations have metrics that say, 'We're 99.99 percent on uptime, we're fast.' The plumbing is wonderful, but nobody cares.