If you do not measure performance correctly, you will face failure at a given time. There is no sustainable success without a robust approach to performance management, regardless of the company, nature of the business, or any other aspect.

The truth is that measuring performance takes time and a considerable amount of organizational maturity. Great companies still insist on the mistake of measuring without establishing proper governance which should allow them to deep dive in understanding root causes, which can be done by starting to understand your customer and employee journey maps (How they Buy, How I Serve).

Well, if you happen to do all of that you might think everything will be ok right? Nope, …you will still need to adjust your metrics and move them from lagging to leading indicators.

A common mistake is to use metrics to only tell a story instead of predicting the next one. One good example often used in isolation, is metric client retention rate. Think about it, when you are looking at the data you are looking at the rear mirror. These types of KPIs are called the lagging ones, nice and important but not the most important ones to predict future trends and help you to differentiate your business when facing competition.
The leading indicators, on the other hand, can provide superior information showing us how the future will look. Following the retention rate example, mature metrics aim at the customer MOT (moment of truth) as an order delivered. It is right at that time that the organization creates simple mechanisms, and sometimes even automatic ones to check customer experience.

There are 5 steps that can help you improve your performance management approach:

1- Listen to the Customer (Voice of Customer), find his requirement and put in a measurable scale

2- Be Simple: don’t wait for all the data, sometimes it will be expensive and might not be valuable at all.

3- Be Visual: make sure everyone is aware of results. It brings to the whole organization the sense of urgency which foster improvement.

4- Form leaders as teachers, they are the backbone to put things back on track. They need to quickly connect results of metrics to the strategic view of the company, unit, department…if not it will be vague.

5- Be disciplined on data collection, frequency, and mainly on the actions for improvements. Remember from 0 to 7 is kind of easy…from 7 to 10 is pretty hard.