Metric Leadership Quotes

If you don’t collect any metrics, you’re flying blind. If you collect and focus on too many, they may be obstructing your field of view.

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.

Trust metrics over intuition. You should have a way to measure every project. Quality is a complex system, the sort of place where your intuition can easily deceive you. Similarly, as you become more senior at your company, your experience will no longer reflect most other folks’ experiences. You already know about the rough edges, and you’ll be the first person in line to get help if you find a new one, but most other folks don’t. Metrics keep you honest.

We no longer use conscription, so our volunteers who sign a blank check payable with their lives must be given every opportunity to return home. Those who choose to not serve, and especially those in civilian oversight roles, must show reserve in directing social changes inside our military. They need to listen to those senior officers and NCOs who know how to compose warfighting organizations. Our military exists to deter wars and to win when we fight. We are not a petri dish for social experiments. No one is exempt from studying warfighting and lethality as the dominant metric, and and nothing that decreases the lethality of our forces should be forced on a military that will go into harm's way.

We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital. Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.

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.

It is worth noting here that, at Amazon, even the most senior executives review the full WBR deck of metrics, including all the inputs and outputs. Metrics—as well as anecdotes about the customer experience—are the area where the leadership principle Dive Deep is most clearly demonstrated by senior leaders. They carefully examine the trends and changes in the metrics; audit incidents, failures, and customer anecdotes; and consider whether the input metrics should be updated in some way to improve the outputs.

Procurement, though, cannot move to a high achieving team acting alone, but if the will, desire, drive and commitment are there, it will succeed. It will require passionate and committed leadership. What this book describes and provides readers is how to progress to this aspiration and subscribe to the following value proposition, “Procurement is the key and respected organisation resource that secures goods, services and materials to the organisation aligned with key business performance metrics, strategic objectives, priorities and values. It is the primary commercial team in the business.

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

When managers and consultants fail, government frequently responds with legislation, policies, and regulations. In earlier times, the federal government limited its formal influence to national concerns such as the Homestead Act and the Post Office. Now constituents badger elected officials to “do something” about a variety of ills: pollution, dangerous products, hazardous working conditions, and chaotic schools, to name a few. Governing bodies respond by making “policy.” But policymakers often don’t understand the problem well enough to get the solution right, and a sizable body of research records a continuing saga of perverse ways in which the implementation process undermines even good solutions (Bardach, 1977; Elmore, 1978; Freudenberg and Gramling, 1994; Peters, 1999; Pressman and Wildavsky, 1973). Policymakers, for example, have been trying for decades to reform U.S. public schools. Billions of taxpayer dollars have been spent. The result? About as successful as America’s switch to the metric system. In the 1950s Congress passed legislation mandating adoption of metric standards and measures. More than six decades later, if you know what a hectare is, or can visualize the size of a three-hundred-gram package of crackers, you’re ahead of most Americans. Legislators did not factor into their solution what it would take to get their decision implemented.

Charles Du designed NASA’s first iPhone app, an award winner and a huge hit with more than 10 million downloads. But he also faced challenges from NASA brass who tried to water down his vision for the app. In a guest blog for Aha!, he laid out a basic principle: Maintaining your product vision is just as important as getting buy-in for that vision. After I got buy-in for the NASA app, a project manager was assigned to our team . . . a project manager is not the same as a product manager. Since my project manager didn’t understand the difference between the two roles and had seniority over me, we fought many battles. The vision of the app was user-driven. So, I validated my product hypothesis by talking to users and looking at our website metrics — a user-centered design approach. The project manager took a different approach. She saw this app as an opportunity to get more resources for our local center . . . She was advocating for politics-centered design that was divorced from any customer conversations. To me, this is a clear case of why product vision should drive everything you do as a product manager. I had clearly communicated why the vision for this app would achieve NASA’s high-level goals. This allowed senior leadership to see that I was working to help grow the whole organization. And it prevented politics from entering the picture. . . . We ended up launching a pure product designed 100 percent for our users — and it was a huge success.11

Values and principles serve as the basis for goals. They're your standards of excellence, your highest aspirations, and they define the arena in which you must set goals and metrics. Values mediate the path of action. Goals release the energy. The

Quality How can higher-quality input be received by each process in the value stream (to improve the %C&A metric)? Is there an opportunity to standardize and error proof work?

Value Stream Management Do policies need to be changed to enable improved performance? Are there organization departmental reporting structures that can be changed to reduce conflicting goals or align resources? Do existing performance metrics (if any) encourage desired behaviors and discourage dysfunctional behavior? What key performance indicators (KPIs) will we use to monitor value stream performance? Who will monitor the KPIs? How frequently? Who else will results be communicated to? What visual systems can be created to aid in managing and monitoring the value stream? Are the key processes within the value stream clearly defined with their own KPIs, standardized appropriately, and measured and improved regularly?

LEADERSHIP ABILITIES Some competencies are relevant (though not sufficient) when evaluating senior manager candidates. While each job and organization is different, the best leaders have, in some measure, eight abilities. 1 STRATEGIC ORIENTATION The capacity to engage in broad, complex analytical and conceptual thinking 2 MARKET INSIGHT A strong understanding of the market and how it affects the business 3 RESULTS ORIENTATION A commitment to demonstrably improving key business metrics 4 CUSTOMER IMPACT A passion for serving the customer 5 COLLABORATION AND INFLUENCE An ability to work effectively with peers or partners, including those not in the line of command 6 ORGANIZATIONAL DEVELOPMENT A drive to improve the company by attracting and developing top talent 7 TEAM LEADERSHIP Success in focusing, aligning, and building effective groups 8 CHANGE LEADERSHIP The capacity to transform and align an organization around a new goal You should assess these abilities through interviews and reference checks, in the same way you would evaluate potential, aiming to confirm that the candidate has displayed them in the past, under similar circumstances.

FIGURE 5.20 The Sales Force’s DNA However, it wasn’t yet a full set of operating instructions. To make the code practically useful, we would need to understand how the framework should be applied to the task of managing any particular sales force. We had the “superset” of things leadership could measure and manage, but we needed clear guidelines to help cull from it the handful of activities and metrics that would enable leadership to focus on its own organizational goals. We needed to know how to apply these insights in a targeted and tactical way. Fortunately, we were on the verge of doing just that.

You’ve now read the central elements to an optimistic climate, but what exactly does it look like? Here’s what it looks like when it takes root and positively transforms the work environment:37 1. People anticipate good things will come from their work. 2. Personal and professional goals are achieved. 3. Personal and professional worlds are integrated. 4. People make satisfying progress with their work. 5. Financial metrics are achieved. 6. People are viewed as significant and the heart of success. 7. Values-based leadership guides actions and decisions. 8. Partnership and collaboration replaces hierarchy-driven interactions. 9. Community building is encouraged. 10. Organizational and personal purpose guide decisions. 11. Strengths are maximized. Keep in mind that the vibe in your team is constantly changing. So the conditions listed above may not all be present at the same time. That’s okay. What you choose to focus on based on the needs of your team will influence heavily what emerges as important.

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.

As author Brigid Schulte writes, “Unlike a century ago, when Americans showed their status in leisure time, busyness has become the new badge of honor. So even as we bemoan workplaces where everyone is busy and no one is productive, busyness has actually become the way to signal dedication to the job and leadership potential. One reason for this is that, while productivity is relatively easy to measure on a factory floor, or on the farm, we have yet to develop good metrics for measuring the productivity of knowledge workers. So we largely rely on hours worked and face time in the office as markers for effort, and with the advent of technology and the ability to work remotely, being connected and responsive at all hours is the new face time.

Every good organization specifies what it plans to achieve in a given period, and these goals, more than the financial metrics that they drive, make up the majority of near-term, controllable results. So, while profit may be the ultimate measure of results for a corporation, the goals and objectives that executives set for themselves along the way constitute a more representative example of the results it strives for as a team. Ultimately, these goals drive profit.

Many organizations make the mistake of using metrics in place of thematic and strategic goals. This is a problem because metrics do not inspire enthusiasm among employees.

the ability to delegate lies at the heart of leadership.3 Regardless of where you land in the organization, the keys to effective delegation remain pretty much the same: you build a team of competent people whom you trust, you establish goals and metrics through which you can monitor people’s progress, you translate higher-level goals into specific responsibilities for your direct reports, and you reinforce them through some sort of management-by-objectives process.

At many companies, when the senior leadership meets, they tend to focus more on big-picture, high-level strategy issues than on execution. At Amazon, it’s the opposite. Amazon leaders toil over the execution details and regularly embody the Dive Deep leadership principle, which states: “Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdotes differ. No task is beneath them.

Progress Review The next key ingredient for the Weekly Tactical meeting is the routine reporting of critical information or metrics: revenue, expenses, customer satisfaction, inventory, and the like. What is reported depends on the particular industry and organizational situation, of course. The point here is to get into the habit of reviewing progress relating to key metrics for success, but not every metric available.

Metrics, simply put, are what you measure. In a work setting, you might measure sales, profits, and customer service. In a church setting, you might measure attendance, new salvations, and tithing.

The Dive Deep leadership principle states, “Leaders operate at all levels, stay connected to the details, audit frequently, and are skeptical when metrics and anecdotes differ. No task is beneath them.

If there are no metrics in place, how can you know how well the value stream is performing, let alone if it is getting better or worse?

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The fundamental #DigitalLeadership metrics are maturity, effectiveness and Digital Footprint

The best way to achieve alignment is to sequentially move through a series of structured discussions that clarify the organization’s strategy, defining precisely what differentiating capabilities are required, then to examine all the systems of choices that develop that capability: work processes; structure and governance; information and metrics; people and rewards; continuous improvement; and culture and leadership (fig. 1.5). These are the conversations entailed in organization alignment. They can—and should—be quick and to the point. But these critical conversations should not be skipped.

the most powerful metric we've seen for analyzing processes in office, service, and knowledge work environments: percent complete and accurate (%C&A)

Failure to involve leadership, employ cross-functional teams, and include relevant metrics, for example, often results in subpar future state designs that collect dust.

We use three metrics to evaluate the current state of 98 percent of the office and service value streams we've encountered: process time, lead time, and percent complete and accurate.

Next, the team will summarize the metrics across the full value stream. We recommend, at a minimum, ... four ... summary metrics: Total Lead Time...Total Process Time ... Activity Ratio ... Rolled Percent Complete and Accurate

You need to choose wisely: what are the two to five metrics that provide the best reflection of overall value stream performance?

We help leaders measure and manage culture. Specifically, we help them establish a reliable culture metric, measure the gap between the culture they have and the culture they need, and then close it.

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The resulting culture of learning, growth, and accountability would be impossible without a high premium on clarity—clarity in the setting of goals, the communication of those goals throughout the organization, the establishment of metrics, and the use of those metrics in gauging the success or failure of any initiative.

Live the leadership principles. Annual reviews factor in how well an employee “has lived up to the leadership principles.” This review metric requires employees to account for “how” they reached their goals while perpetuating and reinforcing the leadership principles as the company’s North Star. If you violate the leadership principles by failing to obsess over the customer, communicating vaguely, or failing to hire or develop a first-rate team or if you allow low standards, ignore details, or fail to “think big,” you won’t deliver the right results.

Behind every metric is a person.

Good process is absolutely essential. Without defined processes, you can’t scale, you can’t put metrics and instrumentation in place, you can’t manage. But avoiding bureaucracy is essential. Bureaucracy is process run amok.

Under my direction, our team-built tools, metrics, dashboards, alarms, and other capabilities helped the sellers meet all of their contractual commitments to us and helped them live up to our marketplace’s high standards and, ultimately, the expectations of their customers. We also built various technological and operational tools for monitoring their performance.

I explained how key judgments were made during my years at the company: “It was not the title but rather who’s got the best idea. Who’s bringing the solution to the table? That’s what was most important.”48 To be blunt, as an Amazon leader, you don’t get the chance to make a lot of mistakes. Screw up for long enough, or for the wrong reasons, and the island will simply vote you off. It is the strongest culture of performance I have ever experienced, and it is directly tied to metrics, results, and being right, a lot.

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Because richer brands are richer by a different set of metrics. It’s in how they solve problems for their clients: They are richer than the obstacles they seek to overcome. They are richer in approach than those who came before them. They are richer in ingenuity than a large, cumbersome company with lots of bureaucratic red tape, internal politics, and a lack of team autonomy and nimbleness. They are richer because they’re selling the right thing and don’t confuse what they make or deliver with what the customer is actually buying. Because they are richer, they are more limber and able to react more swiftly.

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And since your own team is one of the most important dependencies under your authority, your ability to mentor those around you is a key metric during your annual evaluation.

Amazon’s approach to metrics embodies the Customer Obsession leadership principle. The relevance of Customer Obsession becomes evident in the company’s focus on input versus output metrics. If you look at the input metrics for Amazon, they often describe things customers care about, such as low prices, lots of available products, fast shipping, few customer service contacts, and a speedy website or app. A lot of the output metrics, such as revenue and free cash flow, are what you’d typically see in a company’s financial report. Customers don’t care about those. But as we stated at the beginning of this book, Amazon has an unshakable conviction that the long-term interests of shareowners are perfectly aligned with the interests of customers. Controllable input metrics are a quantitative (diving deep with data) and qualitative (anecdotes) way of measuring how well the organization is satisfying these customer interests so that the output metrics trend the way the company desires.

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