Don’t let the metric of the moment tell you how your business is doing.

I’ve been thinking a lot about this recently, Richard (CFO) and I spend a fair bit of time interpreting data.

You might be familiar with the scenario – you’re ambitious and you’ve got ambitious investors or partners. You keep reading books, blogs or tweets that correlate “good” metrics to positive progress.

You keep meeting consultants and analysts who like to flex about companies they work with that have metrics to die for.

How inadequate your venture is by comparison.

ARR growth should be 100%+ and anything less is meh. Logo churn should be under 5% or you’re inadequate. Services revenue should be under 5% or you can’t scale. The list goes on…

So you set about justifying your current metrics, searching for positives while figuring out how to get them all in better shape.

I’m lucky, I’ve had some of the most supportive investors, partners and board members you can get. Almost all of my business mistakes are self generated. And the one I keep returning to is summed up in a quote from a great advisor who told me “You can’t sell revenue”.

Well he was right. Revenue is what happens after people want what you’ve got enough to buy it. And for that to happen you must know how to inform them about it. Revenue is an outcome not an input.

Teams don’t win leagues by setting and measuring points per game. They get the best players. They foster team spirit, encourage work ethic and develop skills. They use metrics to inform decisions not make them.

As Peter Drucker deciphered, business is mainly about innovation and selling (providing value). So as a business leader, your primary concern beyond availability of cash (fuel) might better be creating something of incredible value, figuring out how to sell it repeatedly, and how to make sure your customers stay satisfied.

Metrics measure a state in time, a work in progress. They might need to go down before they go up, and they might need to stay down for a while. That doesn’t mean you’re doing the wrong thing.

And this is where we can easily go wrong – letting the tail wag the dog. Allowing the metric of the moment tell you how your own business is doing.

Wrong.

Metrics measure what you’ve already done.

If you’re like me you probably know how your business is going by the simple things – how positive your customers are, your end users, your team. Whether you’re landing new customers and whether you’re personally satisfied with your end product.

I love measuring things and couldn’t operate without our dashboards or reporting. But use metrics to uncover uncomfortable truths, to track work to be done, or to mark a success milestone.

Don’t let that metric tail wag you, the scrappy dog.

(But keep measuring!)