Most organizations are swimming in data. These days, companies maintain tracking systems for sales activity, inventory, scheduling, accounting, and prospect management. Most field sales, support, and service teams enter and swap data using laptop computers. Additionally, there are ISO 9000 standards, sales quotas, and performance reviews. In essence, every organization under the sun is already doing measurement.

The good news is that all that wonderful data already exists. The challenge is to select a few key performance indicators that are linked to a performance development initiative. How? Here's one example: Last year, in our work with a Big Six accounting firm, we faced a mountain of options for the bottom-line measurement of negotiation skills. To make matters worse, the firm had extremely sophisticated internal data systems. After several hours of fruitless guesswork, we set up a meeting with the director of finance for the tax practice. We asked, "What do the practice partners look at on a monthly basis to monitor the health of the business?" With his answer, we hit pay dirt.

He unveiled a list of 13 metrics requested every month by the managing senior partners. From that list, two key measures were associated directly with the firm's negotiation skills training. They included rateper-hour and percent-of-standard rate billed. By comparing those numbers before and after the workshops, we tracked the firm's progress toward greater profitability.

Moral: Always look for the data currently being used to manage the business at the executive level.

For example, I frequently ask a vice president of sales for a sample of his or her monthly reports. If that information is important to the company's leaders, then it's critical to performance and is most likely accurate. That's a powerful way to develop alignment between the measurement effort and the life-pulse of an organization.

But what if the data used by the leadership team is not enough for tracking progress? There are alternatives, as you'll see in Lesson 5.

Lesson 5: Measurement is Simply Tracking Cause and Effect

The most common question I hear when working with clients to develop bottom-line measurement is "What should we track?" The answer is cause and effect - a principle that applies to any type of performance development.

Revenue, for example, is the result of something. We consider it to be a lagging indicator - or an effect - of performance in the field. In contrast, leading indicators - or causes - of revenue are building new customer relationships, qualifying opportunities, presenting solutions, and closing business.

The powerful distinction between leading and lagging indicators pinpoints the most strategic measures of performance. When combined with deep insight into business issues and knowledge of the specific metrics used by a company's business leaders, it takes the guesswork out of tracking progress. Here's an example:

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