What’s your yardstick?

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Many businesses analyze project results backwards.  Typically, a manager will put together a project proposal that has to go through some financial approval process.  The project will run.  Then the manager will work with an analyst to see what happened.  They will look for the good news to report to their supervisors.  For example, if sales didn’t increase, the manager and analyst may look at sales per customer or number of customers. If not either of those, perhaps units increased.  Now with new media, they may report back on Facebook likes or pins on Pinterest.

To guide the creation of projects, the organization should have an overall yardstick or two.  For example, one of my favorites is “provide a positive and lasting change to sales trend.”  Another great yardstick is, “increase acquisition of new customers.”  By having a couple of significant yardsticks, managers will know that they need to create projects to address the key yardsticks.  Projects that don’t aim to accomplish the key yardsticks are not likely to be approved.  A project to increase customer acquisition may not be approved in a company with an overall yardstick of “increase life value of existing customers” but it may be ideal for a company with an overall yardstick of “increase acquisition of new customers.”  These overall yardsticks may be combined with a few secondary objectives, e.g. “increase presence on social networks” or “increase percent of sales from products produced in company’s factory.” 

When a project goes through the financial approval process specific thresholds on each yardstick need to be assigned.  For example, “provided a positive and lasting change to sales trend” might have two thresholds set on a given project, 3% increase over trend target and 6% increase over trend as a stretch goal.  Once the project is run, the first paragraph of the analyst’s report should include measurement to thresholds on the overall yardsticks.  If the project exceeded the target on the overall yardstick, the project worked.  If it did not exceed the target, then it did not work.  The manager can still report on positive secondary results as learnings for future projects but whether or not the project succeeded in delivering the primary goal (the overall yardstick) is clear.

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