“Llamas are up 5% this quarter, while 22% of people have chosen blue instead of red year-to-date.” So what? Do I care if llamas are up? Is that a good or a bad thing? Is there a goal associated with whether red or blue is chosen? Why do these things matter?
Too many compliance departments track metrics because they think they are supposed to. Managers, the C-Suite and the Board are used to getting metrics from other departments, so they assume they’re appropriate from Compliance as well. But many metrics tracked by compliance programs don’t inform the business about anything. And because of that, tracking them isn’t useful.
A New Series
We’re creating a new series of blogs on metrics that matter. We’ll be delving into examples of metrics being used by the most forward-thinking companies in the world. We’ll also be examining how to use metrics effectively to understand the trends in your business and in your program. Lastly, we’ll be giving lots of examples for you to choose from so you can bring your metrics to the next level.
What is a Metric?
Management consulting guru Peter F. Drucker said, “What gets measured improves.” A metric is simply a measurement. If you can measure it, it can be a metric. Compliance departments typically use metrics to monitor and audit the state of the program. They can also be used to drive efficiency and identify areas for improvement. Ideally, they should provide critical data to show whether Key Performance Indicators (KPI) are being met.
Good Metrics vs. Bad Metrics
Good metrics provide important information. They can tell you whether your program is effective. They can help you to prove that your program is adding value to the business. They can also tell you whether your program is improving over time.
Bad metrics don’t provide any of this information. Creating and reporting on bad metrics has two disadvantages. Number one – it probably takes a long time to collect the information, which is time you’ve wasted at work. Number two – management isn’t getting anything out of the metrics, so they won’t pay attention to them. What’s worse – management may think you’re not adding value because your metrics don’t show effectiveness, efficiency, or positive change in the organization.
We’re Not Confident