What Gets Measured Gets Managed — So What Should You Measure?

Most businesses produce, at minimum, a Balance Sheet and an Income Statement.
Beyond that, not much gets measured.

But how do you even know what to measure?

There are dozens of things you could measure — but that doesn’t mean you should.
For example, in our firm, we don’t measure hours, even though we’re a professional service business.

We measure results — the deliverables promised in our Fixed Price Agreements.

Why?
Because people don’t buy hours. They buy outcomes.
And just like our clients, we don’t pay our contractors for time — we pay for results.

Step 1: Define Your Critical Success Factors

Before you can measure anything meaningful, you have to define your Critical Success Factors (CSFs).

Let’s break that down:

• Critical — without it, you fail.

• Success — it’s something you must get right to succeed.

• Factor — a fact or situation that directly influences a result.

Put simply:

A Critical Success Factor is something that determines whether your business will succeed or fail.

For us, it’s simple — if we don’t deliver results to clients, we fail.
If we just show up saying, “We worked 100 hours, please pay $X,” nobody cares. Clients pay for outcomes, not effort.

Step 2: Turn Your Success Factors into KPIs

Here’s the key point:
You can’t measure a Critical Success Factor directly — it’s too broad.
You can only measure a Key Performance Indicator (KPI) that reflects it.

Example: FedEx

• CSF: Overnight delivery.

• KPI: Percentage of on-time deliveries.

Customers don’t care about logistics complexity. They care that the package arrives fast and on time.
FedEx figured that out by talking — and listening — to customers.

We did the same thing back in 1997.
When we asked clients what mattered most, they told us they wanted Fixed Price Agreements.
Why?

1. They know the price upfront — no nasty surprises.
2. They can hold us accountable for results.

Who Always Has KPIs?

Two types of organizations never skip measurement:

1. Successful sports teams
2. Successful large businesses

Both measure relentlessly against their critical success factors.

Imagine a sports team that doesn’t track player stats, win-loss ratios, or training metrics.
Impossible. They wouldn’t last a season.

Yet small businesses do this all the time — operating without real measurement beyond the financial statements.

Step 3: Discover Your Critical Success Factors

Here’s the simplest way to uncover them:

1. Find what frustrates customers in your industry.

Ask: what do people hate about working with businesses like yours?

Take contractors, for example.
Most homeowners complain about:

• Showing up late.

• Leaving a mess.

• Sloppy work.

Now imagine the opposite:
Your team shows up on time, in clean uniforms, and leaves every job spotless — even using their own dustbuster.
You’d stand head and shoulders above your competitors.

2. Ask your customers tough questions.

Try these:

• “What don’t you like about our service?”

• “What are we getting right?”

• “If you owned our business, what would you improve?”

The answers are gold. That’s your roadmap.

Step 4: Build KPIs That Flow from Those Factors

Once you know what customers truly value, you can design measurable indicators.

Using the contractor example:
Your KPI could be the percentage of job sites that pass a post-job cleanliness check, verified by a daily photo or checklist.

Whatever your business, tie your KPIs directly to what customers care about most.

Step 5: Measure, Share, and Manage

If it’s not measured, it’s not managed.
And if it’s not shared, it won’t stay top of mind.

Build a simple dashboard with your KPIs and review it daily, weekly, or monthly — depending on your business rhythm.

Because what gets measured, gets managed.

A Few Core KPIs to Start With

Here are universal metrics that apply to nearly every business:

1. Number of new customers each month
2. Number of sales contacts or leads
3. Conversion rate from leads to customers
4. Average frequency of customer purchases
5. Average transaction value

Track them. Discuss them. Act on them.

That’s how you move from running blind — to managing with clarity.

Thanks for reading.
If you take one thing away, make it this:

What gets measured gets managed. But only if you’re measuring what truly matters.