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The Shift Beyond the Hype: Transitioning from Vanity Metrics to Authentic Business Objectives

Kateryna Zhuzha

Kateryna Zhuzha

15 February, 2024

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Introduction  Among the sea of metrics, vanity numbers have often taken the spotlight, leaving many organizations lost in a world of misleading indicators and superficial gains. The catch is that many of these metrics (Website views, Leads in Sales Funnel, Marketing spent, Revenue without profit etc.) are more like flashy billboards on a highway, catching your eye but not necessarily leading you to the best destination. They might get attention, but they do not do much for business’s bottom line.   In this article, we are taking a casual stroll through the steps companies need to take to cut through the noise and how to be focused on metrics that make a difference, delivering value to their operations and making customers smile.  Vanity Metrics: When to Use, When to Lose for Lasting Success  In all fairness, you might be wondering, "Why bother then with those vanity metrics at all?". Well, not all of them are entirely useless. They can serve as early indicators or pinpoint a sudden surge in something, for example a viral trend in social media. Plus, some of these vanity metrics gain significance when paired with a complementary KPI that provides a more realistic view of the business landscape. In the absence of context or the integration of a vanity metric with a relevant KPI, it is nothing more than congratulatory high-fives to oneself.  So, what is the recipe for enduring success? Essentially, to focus on what truly matters and leave unnecessary vanity metrics behind. In today's business world, where data is everything, companies need to resist the temptation of flashy numbers that do not really matter and concentrate on what makes them successful.   As an example, imagine if you have a mobile application. A vanity metric might be choosing to monitor a few app downloads – and a success (on the surface) would be if you notice a sudden spike in the number of app downloads - seems like a major  win. However, upon closer inspection, the user retention rate—the percentage of users who continue to use the app after a certain period— might remain low. This means that although more people are downloading the app, not many continue to use it afterward. Thus, instead of celebrating the sheer number of downloads (a vanity metric in this case), it would be much more worthwhile to focus on improving user experience or features to increase retention (a meaningful KPI).   Here are some smart moves businesses can make to dodge those misleading stats:  Make decisions based on actionable data. One of the gravest mistakes a company can make is to base decisions on “high-five” metrics – those numbers that may seem impressive on the surface but lack a meaningful connection to strategic actions. Instead, the focus should shift towards actionable data (e.g., Conversion rates, Customer lifetime value, Engagement rate, Sales pipeline velocity) that provides valuable insights and guidance for informed decision-making. This shift involves prioritizing metrics that truly align with a company's objectives, whether they pertain to customer feedback, user engagement, or conversion rates.  Prioritize metrics that truly matter for their objectives. To be great at picking the most important metrics, you need to first set clear goals. However, when it comes to metric selection itself, consider the following: 
  • Audit and assess the reliability of current metrics. Organize your metrics into a hierarchy that shows the relationship between high-level objectives, intermediate goals, and specific metrics. It's crucial to assess the reliability of each metric in its specific context. For instance, while 'items produced' is a reliable metric in a manufacturing context, it may not be in a coding context. The application and the environment in which the metric is applied can significantly influence its reliability and relevance. 
  • Apply ICE framework and evaluate each potential metric based on its potential impact on your objectives, your confidence in measuring it accurately, and the effort required to track it.  
  • Exploit the 2x2 Matrix and create a matrix with axes representing Impact and Ease of Measurement. Place each metric on the matrix based on these factors. High-impact, easy-to-measure metrics should be top priorities. 
  • If you are uncertain about your objectives and metric prioritization, reach out for expert advice. Consult industry experts or data analysts who can provide guidance based on best practices. 
Implement Frameworks Like SMART Goals, OKRs, and OGSM. To ensure that metrics and objectives remain focused, measurable, and attainable, many companies implement established frameworks such as SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound), OKRs (Objectives and Key Results), or OGSM (Objectives, Goals, Strategies, and Measures). These frameworks provide a structured approach to defining, tracking, and achieving goals, which helps in avoiding the vagueness often associated with vanity metrics.  Regular evaluation and adjustment of goals and its metrics (as needed). Metrics and goals are not set in stone They should be regularly reviewed and adjusted to match market shifts and company priorities. Businesses should make it a habit to check and, if necessary, change their metrics and goals as things evolve. The ability to adapt quickly is essential for staying competitive and responsive in fast-changing markets.  Conclusion Business objectives anchor the organization, guiding game plan, strategy, and vision. Metrics serve as a barometer, reflecting an organization's progress towards these objectives. However, the danger lies in getting side-tracked by misleading or out-of-context metrics, especially vanity ones. By giving these business objectives the spotlight, organizations can create a clear path for understanding what those numbers and metrics really mean in the grand scheme.  Metrics are like the report card for how we are doing, but they are most effective when they are in line with and help us reach those broader goals. Additionally, when companies share their business goals with stakeholders like investors, partners, and employees, it weaves a more exciting and relatable story than a list of numbers without context. This holistic approach ensures that companies consider the broader impact of their actions.    This blog is part of our series "Holistic Horizons". Read further to the next article - "The software delivery tool trap” by Tariq Ettaji.

Kateryna Zhuzha

Kateryna is a skilled professional who works as a Software Delivery Consultant in diverse industries including automotive, gambling/online gaming, e-commerce, and finance. Her primary focus is on enhancing operational efficiency across the whole organization and within development teams while fostering closer alignment between business and technical functions. ​ Kateryna's expertise in both strategic tools such as OKRs and Agile frameworks positions her as a valuable asset for successfully navigating complex industry landscapes. ​

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