From the course: Measuring Business Performance

Why companies measure

From the course: Measuring Business Performance

Start my 1-month free trial

Why companies measure

“

- Let's pretend. Let's pretend I own a professional sports team and I hire you to run the organization, and your decisions, they impact the future of my team, which players to keep, eliminate, and acquire. Keep the present coach or get a new coach? How much should everyone get paid? Can you create and manage a strategy to win today and also help us build for the future? By the way, this is a professional team, so I expect wins, corporate profits, and increased team value. So many responsibilities, and every day, every practice, and every game, I'm expecting you to make good decisions fast. To keep this type of job, you're going to need to be a master of measuring performance. Being able to measure performance allows you to identify the best talent, to identify the weaknesses of those that are struggling, and to create strategies that fit your talent pool. It will also help you see areas where you need to improve. At the organizational level, you can measure team performance and how that performance translates into increased revenue and team value. You can compare the outcomes of your team to those of your competition. Sure, my example used the business of sports, but it's sort of obvious that every company in every industry is doing the same things every day. Everyone is hiring and improving talent. Companies want to maximize their investments in time, money, materials, and people. Leaders and investors must be able to evaluate outcomes related to value and profitability. And nowadays, companies develop and manage strategies by measuring performance. If your company wants to make informed decisions, if your company wants to learn and improve over time, becoming a student of performance measurement is a requirement. And in a world where data is so easy to access and capture, being comfortable with evaluating performance data and being able to establish measurements that help guide and motivate your workforce, these are career-defining skills.

Contents