Accounting & Auditing | Business Strategy | Leadership / Management

What are we measuring and why?

One recent evening after work, I mowed the yard. There was nothing out of the ordinary with that particular yard mowing, but it did spark the comment from my wife, “You just mowed it three days ago!” Granted, I do have a bit of love for yard mowing, but while I mowed, I thought about her comment and how she looked at the decision to mow much differently than did my questionably twisted yard maintenance mind. To me, the decision whether or not to mow is tied to the length of the blades of grass, not the interval of time between mowings. Call me crazy. As I traversed the yard, naturally, I pondered how decisions are made in general when it comes to what to measure and how to measure.

Are we measuring the right things in our businesses or in our accounting practices? Certainly, with the latter, most public accounting firms pay attention to comparative metrics and benchmark data within the profession, i.e., the ole question of “how is that firm 2,000 miles away that looks just like our firm doing?” We also measure and focus on WIP, client retention rates, staff-to-partner ratio, RFP win percentages, revenue growth and other key yardsticks. Years ago, at a conference in Los Angeles, I recall one accounting firm partner saying to me, “I think our firm is really obsessive measuring everything...because we can.” Just because certain criteria can be measured, should it?

Peter Drucker, known as the man who invented modern business management, is famous for saying, “If you can’t measure it, you can’t improve it.” Whether you subscribe to that philosophy or not, it merits contemplation. The big question in my mind is when we measure something, whatever it is, what do we do with that information? How does that measurement create change (and ideally, improvement)? Business measurements should ultimately spit out action items through the other side of the funnel.

This summer, perhaps at a partner retreat or even just at a partner breakfast, is a very suitable time to look at what is being measured--and then evaluate what needs to stay on the list, what measurements need to be cut, and also possibly add new ones. Introspection never hurts, they say. Let the discussions begin!


“In many spheres of human endeavor, from science to business to education to economic policy, good decisions depend on good measurement.”--Ben Bernanke


Rob Nance