If your metrics don’t reflect your purpose, you’re not working toward your contribution, your impact, and your WHY. Here’s what sets purposeful metrics apart from run-of-the-mill KPIs.
- Your business has purpose behind it, so your metrics need to reflect your purpose to be able to measure the right things
- The anatomy of your purpose includes your contribution (your mission), your impact (your vision), and your WHY (the reason behind it all)
- Purposeful metrics should always reflect your core business objectives or goals
- A catalyst conversation can help you unlock your business purpose and create a better KPI dashboard
You may think you have the perfect dashboard of organizational metrics to measure ROI – but what do you really measure?
The average KPI dashboard looks the same as every other dashboard out there. It’s as if there’s a cookie-cutter template that every run-of-the-mill org uses to measure whether its marketing strategy is working.
Our first bit of experience share: You’re not a run-of-the-mill org, so don’t think for a second those run-of-the-mill metrics are going to cut it. It’s not a key performance indicator so much as a key purpose indicator.
You intentionally lead an organization with purpose, so traditional metrics aren’t on your side. Instead, look to measure your ROI using metrics flavored with purpose.
What the heck does that mean? That means metrics that have your org’s contribution and impact behind them.
If you don’t already have your purpose uncovered, now’s the perfect time to do it – before you set your metrics dashboard and spend valuable time and energy tracking KPIs that won’t deliver what you expect.
It’s always a good time to ask some discovery questions (which really shouldn’t be all that hard) about why your business exists, what emotional connections you build, and what good those connections do in the world.
The answers to those questions become the foundation for building out metrics with purpose.
Your purpose matters
Purpose is the North Star of your organization. It’s your guiding light and the reason you carry on every day. It has these components:
- Your contribution, or your rallying cry. This is what you’re committed to executing each day and how you move the needle closer to realizing your vision.
- Your impact, or your vision, in business-speak. That’s your dream, the reason you started your organization, and why the world is a better place for having your org in it.
- Your WHY, or what motivates you. What drove you to start this business? What guides you to lead with intention? What fulfills and drives your action?
Traditional metrics vs. metrics with purpose
Here’s what you need to know: Traditional metrics aren’t the same as metrics with purpose. In fact, they’re clearly distinct.
Once you have your 3 Keys – Purpose, Values, Story – mapped out, you can add metrics so you know you’re on track to achieve them. Remember, you can’t measure just any old dashboard full of traditional metrics. You can’t measure metrics just because they’re expected. (Well, you can, but don’t expect the results to hit your desired outcomes.)
There’s a great way to tell if you’re looking at traditional metrics or metrics with purpose. Ask yourself two questions about every metric on your dashboard:
- Is it a key performance indicator? That is to say, does it measure progress toward core goals rather than toward peripherals you could do without? (P.S. Let’s think of this as a key purpose indicator since your core goals should reflect your purpose.)
- If yes, is that core goal one that reflects your purpose?
The answer to both questions should be yes. Otherwise, what’s the point?
In fact, the answer to question 2 should always be yes. If the answer is no, ask yourself if it will move you further from or closer to your objective. There is not a single reason to have core goals that don’t reflect your purpose.
What makes metrics purposeful?
If you’re still having trouble parsing what makes your metrics purposeful, check your metrics against this list. When you agree with all of these statements about your purpose-driven metrics, then you know you’re in a good spot to move forward and start measuring:
Metrics matter to you
You should choose metrics because you care about them, not because you think you’re supposed to measure that particular performance indicator.
If you’re measuring website traffic that doesn’t correlate to qualified leads, you should drop that metric altogether. Time is money, so don’t waste it by tracking down metrics that don’t reflect your success or purpose.
Metrics are actionable (not vanity metrics)
You’re probably familiar with vanity metrics, even if you’ve never heard the term before. A vanity metric exists just to bulk out your dashboard or your KPI report. It’s a pretty number that doesn’t actually contribute anything. Your dashboard should include only actionable metrics that serve a true purpose to achieve the organization’s objective or, at the very least, contribute to it.
Metrics are selective
This means you don’t choose metrics at random from a pre-set dashboard. Instead, you create metrics based on a thought process built around fulfilling your purpose. They can be unconventional as long as they align – who cares about convention?
Every metric should take into account the organizational impact, your contribution, and your WHY: the three components of the purpose. If a metric doesn’t reflect the purpose, it doesn’t make the cut, period.
Metrics track progress toward specific goals
Let’s be clear here – we’re not talking about just any goal. We’re talking about goals that drive your purpose. Your metrics should always point toward progress that reflects whether you’re on track with your contribution, and impact, and WHY.
The business metrics that are purposeful for you vary vastly depending on your actual purpose and what foundation lies behind it.
Measure these purposeful business metrics
With an eye toward purposeful, specific metrics to track, some you may find useful include:
- Customer acquisition cost – The resources you spend on acquiring each customer across the entire marketing and sales funnel
- Incremental sales – The additional sales your marketing strategy scores over your average recurring revenue
- Sales growth – The percentage sales revenue increases compared to the previous period
- Sales cycle length – The time it takes between making contact with qualified leads and closing the deal
- Lead-to-client conversion rate – The number of qualified leads who buy in or how effective your conversion is
These are just sales and marketing metrics, by the way. Your purpose may drive you to measure different metrics, including financial metrics like cash flow and average production cost or human resources metrics such as employee turnover and revenue per employee.
By the way, don’t sweat whether you’re covering all the metrics you “should” measure. There’s no should when you’re building your metrics dashboard based on your purpose. If it’s meaningful, you’re good to measure it, no matter how unconventional.
Jumpstart your purpose-driven metrics with a catalyst conversation
If you’ve made it this far and are still unclear on your metrics with purpose, let me suggest some targeted thinking and see if you can uncover metrics that align with your ideas and goals.
You could be missing an emotional connection with the product or service – that connection is one of the biggest contributors to your alignment with your goals.
Not only can a catalyst conversation unlock your key priorities, but it can also help you uncover a clear understanding of how to drive growth for your business. The catalyst conversation is here to give you a foundation for it all.
Purpose is your first key; Values and Story are the others. They’re all equally important in aligning every decision you make for your company, including which metrics to measure. Even if they are unconventional.
Start your catalyst conversation with Advantages – let’s collaborate.