Health Metrics: Shift to Sustainability Over Profitability

Annual planning and quarterly reviews are a thing of the past. Weekly management will drive planning processes in the future. The environment is changing daily, and your organization’s plan should adapt far more frequently than on an annual basis.

Video Transcription

Hi, welcome to the “Virtual Strategist.” My name is Erica Olsen. I’m the CEO and co-founder of OnStrategy. Today’s whiteboard video is on business health metrics. This is part of our series on agile strategy or agile strategic planning. There are four parts to our framework related to helping you implement agile strategic planning and results management in your organization. Agile roadmapping, strategy sprints, business health metrics, and weekly health check-ins or MetricMondays. So, check out our other whiteboard videos on those three other topics.

What Are Health Metrics?

Today, we’re digging into business health metrics. So, you can’t run your weekly health check-ins unless you have business health metrics established. So, what are they? They are KPIs with a twist. So, please note that key performance indicators are still very much what you need to use to manage and monitor your business performance. We’re just kind of taking a little bit of a different mindset, if you will, and thinking about KPIs in the frame of health. That’s one thing that’s a little bit different.

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Weekly Reporting is Key

The other thing that’s a little bit different is we want to be able to report on them weekly. So, that’s a really, really important thing to think about when we’re talking about business health metrics and managing and monitoring the health and wellness of your organization and having a finger on the pulse of that on a weekly basis. You’ve got to have that data. You also want to make sure that the metrics that you’re looking at are slightly different and tell you about the health of your business. So, what do we mean? So, an example, is cash reserves. So, cash reserves probably wasn’t on your scorecard last year. Maybe it was somewhere, but most of the time it’s not on people’s scorecards. It is now because, certainly, a key component to the health of your business is cash reserves. That’s an example of a different type of a measure.

Setting Thresholds to Not Fall Under

The other thing that’s a little bit different with health metrics, as we’re calling them, is that you’re not only setting a target, you’re more importantly setting a threshold or somewhere to not fall below. So, in this particular case, we want to make sure that we’re not falling below $250,000 in cash reserves. We’re currently at $350,000, it would be nice to get to $500,000, but we’re really managing to staying above $250,000. If we fall below it, right, warning bells go off, big concerns. That’s what we’re talking about.

Driver of the Business

So, there’s really three pieces that make health metrics health metrics, weekly, thresholds, and also the idea that the metric itself is a driver of the business. Okay. So, let’s kind of look at these. You can see I’ve got five categories up here: financial viability, new customers, current customers, operational efficiency, and team health. These are intended to be examples of strategic priorities. Strategic priorities are the long-term areas of focus for your business. These are pretty standard. You might have different ones. The point is you’ve got a handful of metrics per strategic priority. Again, we want to make sure that we’re comprehensively looking at the whole health of the entire organization, not just one area.


These examples that I have up here are a little bit different types of measures than your standard key performance indicators. So, what are they? Let’s talk about them. In the area of financial viability, we’re adding to the idea of looking at an operating surplus or gap. Are we breaking even, falling below it, or above it? That’s a type of a health metrics that up until now, probably we weren’t looking at. Cash reserves, we already talked about that. In the area of new customer acquisition, this is the area that really is critical to driving your business. So, as is current customers too, but certainly in the new customer area, and one of the most important things is that you have a handful of metrics that tell you about pipeline predictability. Qualified leads is an example of that. Site traffic is always good just to, you know, keep an eye on. But most of the time it’s not a business driver, but it’s good to kind of just monitor. In the area of current customers, here’s something that is worth talking about. So, we said weekly is important. Normally, we’re looking at customer retention as customer retention’s important, of course, keep monitoring that. Add to your tracking and your management. Something that’s a little bit closer in, a little bit more frequent, the idea of engagement. So that’s an interesting metric as is a health metric based on whatever CRM systems you are using.

Again, that’s a more rapid number than retention most of the time. In the area of operational efficiency, so how well are we using our human resources and assets? Sprint commitments is a great one. Error rates is another. There’s tons of metrics in this area. You know your operations. In the area of team health and wellness, normally, we’re looking at employee satisfaction surveys, and most of the time, we do these a couple of times a year. Well, that’s too slow. So, think about the idea of checking in on the weekly sentiment of your organization through a one-question poll survey that you might send out through Slack or through Teams. That’s an example of making something much closer in, much easier to keep your finger on the pulse of the health and wellness of your organization on a weekly basis. Goal achievement or OKR achievement is also another really, really great health metric.


So, with that, summarizing a couple tips, the metrics need to be business drivers. They need to be able to be reported weekly for them to be health metrics. We want to make sure we establish thresholds, not just targets. And let’s get rid of glam metrics. By glam metrics, we mean those metrics that are not business drivers, and they’re just fun to look at. Facebook likes, Instagram likes are some examples of those.

So, with that, good luck establishing your business health metrics. Check out our other videos. Thanks for tuning in. Happy strategizing.



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