Performance Metrics


I wrote yesterday that if a company wants to move quickly decision making must be distributed. But making decisions requires not only knowledge, understanding, and self-confidence but also trust and respect from the management and the rest of the team. Most if not all new hires lack these requirements and are therefore incapable of autonomous decision making for at least the first six months on the job. A fast moving start-up requires lots of decisions each day and therefore a new employee relying on decisions of others is slowing everybody down. The usual solution of growing companies to this problem is to give new employees a very clear performance metric to optimize. People immediately start to leverage their skills, talents, and expertize to optimize their micro metrics such as number of sales deals closed, number of new users signed-up, the increase in web site traffic, and the like. Unfortunately, optimizing a micro-metric is quite often more a detriment than a support to the ultimate goal of a startup - finding a repeatable and scalable business model. Therefore I'm not a big fan of partial performance metrics. In my opinion and experience, there's only one employee performance metric that matters in a start-up - the commitment to the team and the company.

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