Consider the following scenarios:
A) The plan was unveiled in the meeting. A proposed moderate increase in price would lead to increased profits. It sounded reasonable to all.
B) The plan was unveiled in the meeting. A 3% increase in price was proposed to generate $2 million more in profits. One of the reps asked how the price increase would be applied. “Across the board”. Several sales reps suggested the most price sensitive customers would leave. “What provision is made for customer defection?” “1% of revenue”. A voice noted that the three most vulnerable clients each represented 2% of total revenue. The meeting descended into bickering.
Which was a successful meeting? If the intention was to aid decision making I would argue the second. The numbers were wrong but they created a conversation.
Metrics get everyone onto the same page and encourage debate. Metrics illuminate what matters. If your plan is silly it is better to know that now than at the end of the year. Metrics force you to acknowledge your assumptions which is the first step towards improving them.
“Most measurements have flaws. But these imperfections are the very sparks that ignite discussion, expose underlying assumptions and help to align strategy and tactics.” (Bendle 2010)
My key point is that waiting for a perfect metric means you’ll never use them. Something doesn’t have to be perfect to be useful. On many occasions bad metrics help.
Read: Neil Bendle In Praise of Imperfection Deluxe Knowledge Exchange Q4 2010 available at http://www.deluxeknowledgeexchange.com/KQArticle_KQ42010_InPraiseOfPerfectMetrics.aspx