In Search Of Relevant Leader Metrics

Low employee turnover is not a problem for good leaders. In fact, it is widely accepted that long-term workforce stability is achieved because of good leadership. The use of leader metrics will help address the behavior that senior managers and leaders should exhibit in order to support the growth of the organization.

Some of the most important functions of managers in an organization include defining goals, setting performance standards, and identifying minimum acceptable or satisfactory performance. Given the nature of their functions and their placement in the organizational structure, managers hold formal power over other organization members. For managers to become effective at what they do, they should be good leaders. While both terms could easily be mistaken for each other, leaders are different from managers, as the former have “followers” while the latter have “subordinates.” An organization may have leaders and managers. While the manager can assert his authority by giving the objectives, measuring performance, and monitoring work progress, the leader is the person that everyone turns to when they want to know why certain tasks need to be done.

Leadership metrics are measures that can be used in determining and evaluating the leadership potential and strategy of a manager, or even a subordinate who shows great promise as a leader. These metrics are categorized into “input metrics” and “output metrics”. Input metrics are used to measure the investments, behaviors, and other resources necessary to obtain desired goals. Output metrics, on the other hand, represent the results for a metric category. Examples of leadership input metrics include the percentage of company executives’ time spent on strategic innovation vis a vis daily company operations, percentage of product, service or strategic innovation projects with executive sponsors, and the percentage of managers with training in innovation tools and concepts. An example of leadership output metric is the number of managers that become leaders in other category businesses.

One of the most important objectives of management leadership is the enforcement of the zero tolerance principle on waste or defects in company operations. This is a manifestation of a company’s commitment to always work on obtaining success instead of merely settling for something less. Based on this particular goal, the metric that could be used to evaluate how leaders set this vision is an inventory level that is set at a minimum. Inventory typically hides waste from process defects thus; high inventory turns should be the aim for everybody. Inventory turn refers to the frequency with which the company updates or changes its inventory.

Nevertheless, to experience the maximum benefit of the use of leader metrics, it is important to choose only such metrics that are relevant to the success of the organization. The chosen metrics should be consistent with the nature of the organization’s operations. Moreover, it is encouraged that company managers should pre-determine only a few important metrics, rather than use several metrics that will not really be of help in analyzing the leadership strategies used in the workplace. Finally, the chosen metrics should be communicated to both the managers and subordinates, for them to have a better idea about what their performance standards should be.

By: Sam Miller

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