A customer of mine once sent me a book called Moneyball: The Art of Winning an Unfair Game by an author named Michael Lewis.  (Perhaps he was trying to educate me after I unwisely made a bet against the Red Sox with him.)  The book explores the unexpected success that has been earned via Billy Beane's management of the Oakland A's.  The team is playing with less than one-third of the resources than its competitors invest, yet it has realized more pound-for-pound results.  One explanation focuses on the Key Performance Indicators which Beane deems to be important.

We can measure a baseball team's performance in hundreds of different ways. How often is each player reaching base?  Which base does the average hitter reach?  How many runs are opposing teams earning against each pitcher?  How often is each pitcher striking-out his opposing batters?  How many errors does each player commit?  The answers to these questions are less important than the actionability (is that a word?) of the questions that are asked.  The answer to many of the questions that we ask about baseball is "Who cares?  What are you going to do if the number is too low?  Can you prove that a better number leads to successful results?"

Sound familiar to anyone?  Many of us commit the same mistake when it comes to our marketing, merchandising and performance analytics.  How many of us are still measuring our success by KPI's such as unique visitors (of which we are almost always uncertain unless a mandatory sign-in process exists), email open-rates (without taking cost-per-acquisition into consideration), or geographic sessions (without taking regional populations into consideration)?

So, in the spirit of Moneyball, all we have to do is rally around the "right" KPI's while our competitors are wasting their resources on the "wrong" KPI's.  That should be easy enough, right?  ; )  If you're hoping that this is the part where I tell you which KPI's are the right ones, then I should apologize right now.  Without knowing your business, I can't provide that answer.  However, I can recommend that you take a look at your performance indicators with the following questions in mind:

  1) How many KPI's can we successfully rally around at once?

  2) Can we accurately measure those things?

  3) How well can we drive our culture around these metrics?

  4) What type of "red flag mechanisms" will alert us when we miss our targets?

  5) Do we have the resources to improve upon our shortcomings once we identify them?

We cannot let resources become our self-inflicted downfall.  If Billy Beane can outperform his well-funded competitors, so can you.