Driving the ROI – where to start your projects metrics?
So you have started your ERG and done your homework on what the business strategy of your organization is. You also found areas of need in your organization that you want to address with some serious projects. – But where to start building a project metrics? What is important, what makes sense and is meaningful?
Establishing metrics can be stressful and confusing. What metrics persuade your stakeholders? Less is often more, so focus on just a few parameters that are to the point rather than drowning in a myriad of complicated and detailed measurements that will quickly suck your precious time and bore your audience to death.
In general, your project metrics can reflect the ERG or focus on the business results that the ERG achieves – I opt for emphasizing the latter.
ERG focused metrics
Let’s look at the ERG focused metrics first. It seems the traditional approach for most ERGs that may have evolved from affinity and network groups: The basic idea in establishing this kind of metrics is to help justify the ERG by demonstrating its growth and maturity over time. The typical metrics are, for example, the number of active and passive members, the participants in meetings, how many new faces (=potential recruits) show up and how many of them signed up as members, etc. These figures are helpful to explain that there is an interest in the ERG, what happened to funds (often spent on catering) or if the organization met demographic goals of diversity, for example.
However, if you measure along these lines alone you may miss out on leveraging your ERG to get recognized and valued as a credible business resource to the organization.
Question for you: which message does an executive find more compelling? “The ERG has 300 members and meets monthly for two hours.” or “The ERG contributed to $260 million in sales last year.”
Now, this kind of metrics takes a different approach, doesn’t it? It aims at driving business results, the famous return-on-investment (ROI), the ‘bottom-line’. It easily grasps a stakeholder’s attention because it demonstrates a significant and direct value proposition for the company.
By the way, the above example is real! According to DiversityInc.com, Ford Motor Co. directly linked the sales of $260m in one year to an initiative of its InterFaith ERG!
– Look it up yourself if you like: http://www.diversityinc.com/cgi-bin/cms/article.cgi?mode=printable&id=284
Not all goals are high rolling and they also depend on the business you are in. The spectrum of possible success metrics is broad and ranges from obvious business goals such as increasing revenue, profit, market share, quality, speed and customer satisfaction to –perhaps‑ less obvious ones such as increasing employee satisfaction, intellectual property created, employee acquisition and retention or reducing turnover, waste or business risks, just to give some examples.
How to get started
For many ERG leaders, the most difficult question is how to establish a metrics when the targets appear fuzzy and are not as easy to grasp as a sales figure that was either met or not.
To find your bearings, try this: Relax. Breathe deeply. Then take a step back and use your imagination… Envision a picture of what the results look like when the project completed successfully. What do you see when you have reached the goal, what are the visible and tangible results, what has changed?
Now describe this envisioned picture in words in a demonstrative way using clear and unambiguous terms such as “By September 1st I want to be able to touch X and use to do Y with Z!”
This provides you with a great starting point to refine more specific requirements and also leads quite naturally to meaningful metrics in a simple but effective way such as the tangible deliverable (X), the target time until completion, some required feature (Y) and some input (Z) requirements in the example.