The terms “data” and “metrics” are tossed about almost interchangeably in some business articles, but they refer to very different things. Both can be measured, but metrics are far more useful to CEOs and business owners. Though all metrics are data, not all data qualifies as a metric.

person-731479_1920In short, a metric is direct data tied to a discrete action or event that predicts a result. By determining what drives your business performance and which data represents those drivers, you determine what data becomes a metric to be measured and managed.

Know the Difference between Metrics and Data

“One million visits to your website” is an example of data. “25,000 sales orders received via your website” is an example of a metric, because that bit of data directly drives revenue growth. You can grow visits to your website and not necessarily affect revenue, but growing website sales orders will absolutely increase revenue. In the end, the goal is knowing what data links metrics to business drivers.                                                                                                                 

Reverse Engineer Your Business to Find Metrics

By analyzing your organization’s internal processes, you can discover which specific actions lead to results. This cause and effect relationship defines which measurements tell how the business is doing, and thus what actions need to be measured and managed. In other words, you can’t pick your data but you must pick your metrics. All metrics are proxies for what ultimately matters and drive your business.

Metrics Are What Drives Your Company

There is an old saying that metrics are what you measure and what you measure is what you manage. You manage and measure sales, costs, market share, profits and cash in the bank. In effect you manage the key drivers to your business health. The focus should be on those drivers that have the most direct impact on the health of the business. For sustainable success, your company is your metrics.

 Key Attributes of Good Metrics

In managing your business, it is important to determine which metrics drive which results. The data underlying the metric must be consistent, readily available, and easy to collect at minimal cost. If too much time is needed to gather data and confirm its quality, then it is likely the process will rob you of time to manage the business. Metrics are useful only if you can use them for timely decisions.

 Control Metrics and Control The Business

You can’t control all data as it results from transactions and events; much of which may be out of your control. If the cause or source of data cannot be managed then it can’t be a metric. Economic events affecting your business are classified as data and are not metrics for this reason. Metrics are only useful if you can manage them.


Identifying and managing the drivers to your business success is a key to success in business. By creating a model where metrics can be varied to project changes in business performance, you create a tactical planning tool for improving success. By doing so, you r business becomes proactive with its environment rather than reactive to it. The most successful businesses are those that have a strategy, a plan for execution of that strategy and processes to manage change. Having a model to forecast scenarios of change through well-defined metrics gives you a competitive advantage.

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