One of the recurring messages of Xmrit is the importance of your leadership team reviewing your business’s key metrics in a Weekly Business Review (WBR). Done well, your WBRs will build a shared causal model of how your business truly works; preventing your leaders from having untested superstitious beliefs.

But a common genre of feedback we get is along the lines of:

Is that it? Isn’t that just a normal weekly metric review? I think we may even call it a WBR already. What makes the WBRs you’re talking about any different?

This feedback has become so common that I wanted to describe the ways metric reviews often fail to work as well as WBRs.

Not Reviewing the Whole Business

The most common way metric reviews fail to replicate a true WBR is when they only include metrics from a single function, such as Sales or Operations, rather than the entire business.

The purpose of the WBR is to bring all the leaders in a business together. If every set of leaders is doing their own metrics reviews they miss the repeated exposure to how their metrics interact with other leader’s metrics.

The building of a shared causal model is a social endeavor. You cannot do it in isolation.

This is not to say that functional metric reviews are pointless, but that they serve a different purpose. They allow a function to go deep, spending more time on a wider set of metrics that matter to them. These reviews are a tactical necessity, but serve a different purpose to a WBR.

Focus on outputs not inputs

The second way the metric reviews fail to live up to a true WBR is by being focused on output metrics rather than controllable input metrics. You can see this when the majority of the review is taken up looking at achievement of financial targets, and not the actions that had to be completed to reach those targets.

The function in many businesses that does input metrics the best is Sales. Within Sales there is a strong culture of measuring the entire sales funnel - from early input metrics like the number of quotations and enquiries, to middle of the pipe metrics like coverage ratios, to output metrics such as the $ of deals signed.

Making your reviews input-focused rather than output-focused forces you to understand which actions truly drive your business. No more superstition and confirmation bias about what works, every week you are forced to interrogate the relationship between your inputs and your outputs.

Not Understanding Your Metric’s Variation

Your metrics go up and down every week. Sometimes they go up a lot, sometimes down a little, and sometimes they barely change at all. But just looking at the changes week to week tells you very little about your business.

At Xmrit we emphasise the concepts of Routine and Exceptional variation to understand when to react to changes in your metrics:

Routine Variation: The predictable variation naturally present in your process all the time, and in all processes to some degree. There is no need to react to routine variation when you see it in your process.

and,

Exceptional Variation: Non routine variation caused by specific, identifiable factors. Exceptional variation indicates a need for investigation and corrective action

Unfortunately, many people don’t know what is routine and exceptional variation in their metrics. They see a 20% increase in a metric from the previous week and jump into action “

something happened - it must have been that change I made. Good to see it’s working

!”

This response is a sign that you have no model to understand if a change in a metric is meaningful or not.

They don’t understand variation.

If you have no way to understand if a change matters you will find it impossible to use data to help you improve your mental model of the business. Instead your model will be a mishmash of gut instinct and anecdotal evidence, supported by a healthy dose of confirmation bias from your metric reviews.

One of the reasons we built the Xmrit free tool was to give people one of the easiest ways to answer the question - is this variation exceptional? XmR charts are not the only way to do this, or even always the best way, but they are one of the quickest and simplest ways to start.

Updating Your WBR With New Knowledge

The last way that metric reviews often fail to live up to the potential of a WBR is when you start running them on autopilot. Every week you look at the same numbers, never adding or removing metrics, never showing signs that you have expanded what you know about how your organisation works.

But your business is never static.

Your competitors change strategies, your customers change preferences, and unexpected things happen. If you aren’t changing your WBR it is a sign your causal model is fixed, and is not updating in response to new knowledge. This fixed mindset is a version of superstition, and will eventually lead you to make poor decisions that cost you.

There are two reasons you may want to add a metric to your WBR, either in response to something that happened, or because you want something to happen:

1. Something Happened

   Something, usually bad, has happened. The next time you are prepping for your WBR you should be asking yourself - “What metric could we have added to the WBR that would have allowed us to avoid this happening again?”.

   This bad thing may be a one off incident, or it may be a long running problem. In Cedric’s deep dive into Amazon’s WBR he wrote about Amazon’s struggles with recruiting, and therefore the recruiting metrics became a significant part of Amazon’s WBR. Over time recruiting became less of an issue, and the number of recruiting metrics declined, showing how Amazon’s view of its constraints changed.

2. You Want Something to Happen:

   The other reason to add metrics to a WBR is when you want to drive behaviour in your organisation. Commoncog had a recent example of this where we wanted to drive more engagement in the forum, and therefore added a new metric of Active Hook Topics:
   
   Active Hook Topics: The number of unique topics in a week where >= 2 different non-staff members have commented.

   By monitoring Active Hook Topics every week, and setting ourselves a target of >=5/week, we incentivised the team to post more to the forum and invent new highly engaging topics. This generated the exceptional variation we wanted to see, and quadrupled our key output metric - Number of Daily Average Engaged Users.

Where to Start

As you can probably tell, starting a WBR is not a one time event. You need to constantly assess all the relevant input metrics from all the relevant parts of your business, work out what the routine variation looks like for those metrics, and continually update the metrics as your business and the world changes.

But you aren’t starting from scratch. You already have some ideas about what matters for your business, and what doesn’t matter. You may already be measuring these things in pockets of your organisation. The first step is to bring these metrics together in one place for your leadership team to review. From there you can start iterating and improving on your WBR, making it an advantage against your less focused competitors