Monday, February 10, 2014

Data tells Secrets.

This is part 3 of my series on the minimal framework I use for managing small teams. It was originally published to my Medium blog. Checkout an overview of the framework in part 1 and a closer look at Priorities in part 2 if you have a minute.

Basic guidelines for measuring progress on your team’s priorities

Oh, Hi! Thanks for starting to read this post. Now stop reading and listen. Close your eyes if it helps.

What did you hear?

If you listen closely you can hear…. Data.

It is telling you secrets. Secrets about the health of your team. Secrets about your customers. Secrets about what is going to happen in the future.

Are you listening?

Choose the Right Metrics

If you remember in my last post we talked about Killing Good Ideas as a way to cut down to the Priorities that your team should focus on. Lets continue by asking this simple question: What is the best way to measure progress on my priorities? Just like you were focused with your Priorities, stay focused with your data metrics. I like to have 3 — 5 metrics for my teams; as few as possible.

It is also a great idea to look at what others in your industry or discipline are measuring. If your team is building a web or mobile product for example I particularly like Dave McClure’s talk on Metrics for Pirates. If your team is building something else look for a similar outline of measurement practices for your discipline or industry. Let these inform your decision but don’t forget to stay aligned with your Priorities.

“You can’t improve what you don’t measure.” — Peter Drucker

More Data tells More Truth

When scientists want to learn secrets from data they make sure that they have enough data to make a conclusion before they engage in analysis. This is referred to as a statistically significant sample of data. The lesson to be gained is not to make conclusions based on too little data.

For example, one of the metrics that our team at Newmind measures is our Net Promoter score. This is a metric that measures how satisfied our customers are with our service. Lets say one or two customers give us a bad score. It would be premature to conclude that all of our customers are dissatisfied based on such a small sample of data. We need to wait until a larger number of customers weigh in before we draw conclusions from this data. On the other hand, if 30% of our customers have provided feedback and it is trending negative then we have enough data to start drawing conclusions, taking action and making changes.

Don’t Have Enough Data to Make Decisions? Make Decisions that Create More Data

Sometimes when your team is small and you are just starting out you don’t have any data to use in your decision making. What then? Well that is a signal that you should be taking actions that give you data to measure.

If your team is building hardware, this might mean developing a prototype that you can take to customers and gather data about their reactions. User studies, blog posts, customer interviews, research and many other activities can increase the amount of data that you can use to measure progress against your priorities. Don’t make the mistake of charging blindly ahead if you don’t have something to measure your progress. Stop and get that stream of useful, measurable data going before you continue.

Some Things Can’t be Measured

So, you’ve got your Priorities in order and now you’ve chosen some key data metrics to measure your teams progress. Congratulations! You are really getting the hang of this! Just make sure you don’t get drunk on the power of your data. It is an incredible tool but don’t go too far.

Don’t miss intuition and inspiration when they come knocking just because they don’t fit into a measurable data driven world. After all, some of the best things in life can’t be measured, like the closeness you feel with your best friend, the way that song moves you or the feeling that you feel on a golden fall walk with the people you love. Make sure you leave room for these unmeasurable things in your work and on your team.
“Know the rules well, so you can break them effectively.” — the Dalai Lama

Daniel Jefferies
Daniel Jefferies is the founder of Newmind Group. Based in Kalamazoo, Michigan, Newmind Group began as a small, regional IT company in 2003.