The illusive means to understand company behavior by using a 'draw by numbers' methodology is a challenge all organizations face.  There is no doubt that company performance, consumer loyalty and client relations are developed and nurtured through the analysis of numbers; also known as 'performance metrics.' The inherent problem with metrics is that no matter how well run your organization is you cannot prevent the gaming of those numbers.  The moment you choose to manage by a metric, you invite manipulation.  Metrics are only proxies for performance, and thus should be treated as such.

In the following, I will describe five strategies that can allow an organization to better utilize the power of performance metrics.  These strategies are not exhaustive by any means, however, they will provide a top-level perspective that can build a long-term means to collect relevant data for decision making paramount to out-pace your competition.  Let's face it, if you cannot do that, good luck growing your business.

1) Evaluate your current metrics and ask:  Does your current metric provide a means for you to determine how you are competing in the market?  Can you or do you compare against industry benchmarks?  Do they provide a means to analyze how you will fair against your competition in the future?

2) Beating last years numbers is not the point, and today we can really see the value of that statement.  A performance measurement system needs to tell you whether the decisions you are making now will further your efforts towards the achievement of the organizational goals in the coming months.  The secondary question that arises is does your organization effectively communicate the goals?
     a.  You want the measurements to lead you rather than lag the profits in your business.
     b.  You need to evaluate the things that you say no to as well as those that you say yes to.

3) Avoid low quality data.
         a.  Avoid using a financial metric to compare a non-financial activity.  A good example of that would be trying to establish an ROI for (IT, HR & Legal).  This is commonplace from departments that are looking to justify there existence rather than being outsourced.  How are these casual links justified?  This requires a robust and qualitative approach that probably cannot be drilled down to a number.  Do not get caught in that trap.

     b.  Does your data collection capture the essence of the organizational goals?

4) Avoid gaming of the numbers.
    a.  o minimize gaming you need to diversify the metrics and create a holistic platform.  Here is an example:

                                                               i.

Use current income and cash flow statements.

                                                             ii.

Measure actions on emerging business activity (sales & marketing).

                                                            iii.

New business opportunities.

5) Sticking to the numbers too long is dangerous.  Although cash and growth are paramount to sustainability, looking at last week, last month and last year are dangerous.  As stated earlier, it is clear in today's climate that historical data is less relevant than it was say two to three years ago.  The focus moving forward has to be around profit and the relative position to your competition.
   
   a.  A one-size fits all strategy does not work, you need to know your customer, client and your competition.