Over the past few months I have had the opportunity to work for a company in the health and wellness space. You may not be aware, but I have a Master’s in Sports Medicine and an Undergrad in Athletic Training. As a consultant for this company it was awesome being able to use the knowledge I previously gained and apply it in the business world.
As with all companies I try to understand the problem they would like to solve and the solution the company is proposing to solve this problem. Early in my discussions with the company we tried to develop a system that would change user behavior to help them reduce or prevent chronic diseases. Naturally, we started talking about tracking BMI (Body Mass Index), weight, body circumference and many other traditional measurements used in determining health.
You Already Missed It
If you haven’t caught it by now then you are probably like many other people who want one thing and measure something completely different.
Remember, we are trying to change behavior.
A behavior would be the number of times in a week a person exercises. If the goal was to exercise three times, then measuring that would be as simple as counting it. The follow-up would be, did you exercise three times this week? Yes or No? Sounds simple, yet this is a common mistake, not only in our personal lives but in business too.
For example, what if a company wanted to increase its customer satisfaction. How would you measure this? In many cases companies would measure the results of the customer satisfaction by the amount of revenue that was increased or lost. Obviously, if customers were more satisfied then they would spend more money…
Compare and Contrast
Let’s do a side by side comparison of a conversation that would take place based on the information currently presented.
Q: “Hey, how many times did you exercise this week?”
A: “I lost 2 pounds!”
Q: “How much did our customer satisfaction change last quarter?”
A: “We increased sales by 2%.”
Measuring Risk Factors
These responses are ridiculous, but this is what happens! What is being measured is a risk factor, not the critical piece of information needed to make decisions. A risk factor is some measurement that has been linked to a condition. In the weight example, being overweight can lead to obesity and then a whole plethora of other diseases. A risk factor for diabetes is typically Body Mass Index. Likewise, not reaching projected sales revenue could lead to laying off people which could result in closing the doors. A risk factor for shutting the doors is typically lost revenue. The critical thing to note about risk factors is that they may not be direct causes for an outcome. A high BMI, for example, does not mean you are guaranteed to have diabetes. Likewise, poor customer service does not mean your companies is going out of business.
What should be measured is the Key Performance Indicator (KPIs) , this is the question that is being asked. If you want to know about behavior measure the behavior. If you want to know about customer service measure that. Take a moment to look at all the possible KPIs that could be involved in the risk factor you are interested in learning more about.
Jason Thompson from 33 sticks uses a logical analysis framework to discover what the question is being asked and what measurements should be taken to better understand the problem/solution.
Correlating Risk Factors to KPIs
After you have determined all the measurements you think are related to the risk factor run some basic analysis to correlate your findings to the risk factor. This basically means see what happens with one and watch what happens to the other. Do the research and you will see if they are correlated. Here is a how to calculate the correlation coefficient. The correlation coefficient,CC, is the value of how closely related to measurements are to one another. The closer to 1 or -1 the number is the higher they are correlated.
By measuring the number of times you exercise per week, assuming you are hitting the 3 days per week and your weight isn’t going down, then there is something else that is going on, assume a CC of -.23. If you have increased customer service and revenues aren’t going up then there is something else going on, assume a CC of .16. Dig deeper and check the other measurements you have been taken. Maybe you find out that the amount of sleep you get has a CC of .89 this would suggest you look deeper in to the amount of sleep you need to lose weight. After more experimentation you can start to optimize the amount you sleep to give you the best outcomes possible.
This process of measuring KPIs and correlating them to risk factors is an ongoing process. Start thinking about the risk factors in your business or personal life, put together what behaviors you need to start measuring, measure them and correlate them to the risk factors and finally, start making decisions that will help you reach your goals.
“If you can not measure it, you can not improve it.” ~Lord Kelvin (William Thompson)