Monthly Archives: November 2016

Know More About Metrics-Driven

Having spent the past several years growing Brainscape and working with dozens of companies through the TechStars and Edge EdTech accelerators, I’ve noticed a persistent entrepreneurial resistance to becoming truly metrics-driven. Founders are often tempted to postpone the building of detailed business dashboards in favor of spending valuable time and engineering resources on building the actual product.

While this (often unconscious) bias of “gut instincts” over MBA-style analysis can help you during your early stages of customer development, it can come back to bite you in the arse the longer you wait. Very few companies have successfully achieved exponential growth, raised capital, or negotiated strong exits without first having a solid analytics model that has been iterated upon for many months or years.

Below are five reasons why you should start focusing on measuring your company’s key metrics and growth levers ASAP. If you seek further guidance as to how to do so efficiently, feel free to read my Complete Guide to Building a Metrics-Driven Company.

1. Stay focused.
At most companies, our teams think of ideas for new product features or marketing campaigns much faster than we can implement them. Having a solid metrics model allows you to prioritize these backlogs using real data and forecasts.

For example, performing a funnel analysis will help you understand whether it would be worth spending time to optimize a particular conversion bottleneck. Similarly, gaining a strong understanding of each marketing campaign’s LTV/CAC ratio will help you determine where to spend your valuable marketing dollars.

Often you can even run simple experiments to further validate hypotheses before making large investments. Espousing these types of metrics-driven strategies will improve your use of limited resources while increasing your team’s respect for your leadership.

2. Motivate your team.
Reliable, current metrics are a critical prerequisite to being able to create meaningful OKRs for your team. Not only will solid analytics help you set key lines in the sand for the whole company to meet, but they will also allow you to better delegate results to individual “owners” of particular KPIs.

At Brainscape, we have a master KPI dashboard that summarizes our high-level goals like New Signups, Active Users, and Revenue. That master spreadsheet is fed by “feeder” spreadsheets that derive our sub-KPIs like Conversion Rates, Engagement, Retention, and Virality. Such a hierarchical structure allows us to delegate individual metrics to the responsible team members, thus allowing us to “keep score” in a way that is more motivating for each owner.

Some Reason Leadership Development Needs to Be Updated

There’s a leadership problem in the workplace. Companies lack employees with leadership skills and fear they don’t have enough rising leaders to take the reigns. Case and point — almost half of the companies surveyed for Workplace Trends’ Global Workforce Leadership survey in February and March 2015 said that leadership is the hardest skill to find in employees.

What’s more, among the 1,000 employees surveyed, only 36 percent said leadership is a strength in their organization.

But the problem doesn’t lie in employees’ lack of skills or current leadership’s inability to train future leaders. The problem is leadership development itself. According to the same research, 39 percent of companies surveyed offer leadership development programs, but just 15 percent of employees felt they were effective.

The reality is that leadership development is seriously outdated. Here’s why the old model won’t work anymore.

It lacks metrics.
Almost everything in business is tracked and measured — everything but leadership development. In the old model, employees undergo training and coaching, and then start in leadership positions. And that’s it.

But how do employers know if their development program is really working? Do they know where it’s going wrong? What needs to be improved? What employees think about the process? Which parts of the programs are effective?

They don’t. Why? Because the traditional model of leadership development and coaching isn’t attached to metrics. In fact, 58 percent of companies are still using spreadsheets as their primary way to track performance metrics, according to the Workplace Trends study.

Employers aren’t measuring to see if their training methods are effective, and that’s a major problem. Without metrics, businesses can’t understand where their programs may be failing and how to make development more effective.

The new model of leadership training needs to track metrics before, during and after development programs. That way, employers can adjust their strategies and get the most out of leadership coaching and development.

Only senior level leaders are trained.
Leadership development and coaching is expensive. So it’s typically reserved for those at the senior and executive leadership levels. But that means there’s a whole group of middle and lower-level managers without leadership experience — and their lack of training has a serious impact.

Gallup’s 2015 State of the American Manager Report, which studied 2.5 million manager-led teams in 195 countries, found that the top two reasons employees are promoted to management positions are because they were successful in a non-managerial role and they have experience and tenure with the company — not because they have leadership potential or experience.

It’s no wonder that only 35 percent of managers in the Gallup report were engaged at work. And when managers are disengaged, so are the employees they lead. The study found that employees who are supervised by highly engaged managers are 59 percent more likely to be engaged than those supervised by actively disengaged managers.

Throwing employees into leadership positions cold doesn’t work. The new model of leadership development needs to extend to every level of management. Companies need confident and trained leaders throughout the business, not just at the top.

Development programs aren’t scalable.
Training more and more leaders at every level uncovers another problem with traditional leadership development — it’s not scalable. What does that mean? Businesses don’t have the right tools and resources to support coaching hundreds of employees at once plus track them all.

Most employers can only coach and train a handful of employees at one time. Employers need new technology to seamlessly train and track the development of mass quantities of leaders across the organization. Businesses already use similar software and tools to onboard new hires, and it’s time they adapt the technology for leadership development.

Coaching is inconsistent.
Employers typically turn to external leadership coaches and programs for training. But in this model, the coach controls the messages and philosophy they teach to leaders, and that can create a disconnect between the company’s mission and goals.
As it is, 61 percent of North American employees surveyed by Achievers in 2015 said they don’t know their company’s mission. When coaches are in control, leaders receive inconsistent training that doesn’t align with company practices and values, and they can’t reinforce the mission to employees.

Employers need to take back the control and launch leadership development programs consistent with the company mission, values and goals. This way, development and training aligns with the ROI and metrics companies want — not what the coaches want.

How to Realistic Sales Goals

Q: How do I set realistic sales goals for my employees?
A: John Doerr, co-president of Rain Group, a sales training and consulting firm in Framingham, Mass., offers this approach.

Determine your company’s goals. “The toughest thing for entrepreneurs to ask is, ‘All right, if I get to this level, will I be happy?’ The first step is to figure out where you are and what you want.”

Assess market potential. “That’s going to influence how big the quota should be. If [you’re] in a brand-new space, the quota could be really high. You have to adjust your goals to the overall market potential.”

Evaluate your salespeople. “You want your goals to be an incentive that people can reach. You don’t want people to be discouraged. What’s possible for them based on their previous sales level and their skills set?”