🖤 Open Works #023 How to Measure Productivity Properly

Welcome to Open Works. Every edition we solve a ‘people and culture’ problem crowd-sourced from the Open Org Community of 420+ Startup and Scale-up People Leaders.

📚️ Recent Editions

If you’re new round here, not yet a subscriber or you straight up missed it, here are some of our recent editions.

🎉 Edition 20: Everything we built in 2024 – our top open source resources for people leaders, downloaded 800k+.

🎯 Edition 16: Building my people strategy from scratch! SOS – a principle driven framework to building your startup’s people strategy.

💰️ Edition 17: How to share financials without stressing your team or your CEO – a guide to incrementally improving financial literacy and transparency.

💭 This Week’s People Problem

🖤 Our Take On How You Solve

🏃 TL;DR:

• Focus on how people spend their time, not how much.

• Choose metrics that align with your company’s business context and growth stage.

• Be mindful of the “busy-ness trap” – measure outcomes, not outputs.

⚡️ The Problem

When it comes to productivity and performance, it’s easy to get hard stuck in a maze of possible metrics or fall into the trap of measuring "busy-ness."

I’ve worked with some CEOs who have asked for some pretty wild things here 😅 (cough, monitoring software, cough, cough) and have learned it’s important to help guide stakeholders away from data points that reflect activity rather than impact.

It’s crucial to anchor your metrics in what truly drives business outcomes.

💡 Our Take On How To Solve

👉️ Pick meaningful metrics for your size and stage and make sure you focus on outcomes not output. Here’s what I mean.

⚠️ Bad Productivity & Performance metrics measure OUTPUT not OUTCOME. Examples to stay clear of: 

- Time spent on laptop/at desk
- Hours worked
- Slack messages sent per person
- Tasks completed

🔑 Good Productivity Metrics

1. Cycle Time – Measure the time taken for deliverables to move from start to completion. Can apply this to product team workflows (e.g., feature cycle time) or any team’s internal deliverables/requests/tickets and understand bottlenecks and flow.

2. BAU: Strategic Work Ratio – Compare the time teams spend on business-as-usual tasks vs. strategic work. Not much point having OKRs if your teams are only able to spend 2% of their quarter on them!

3. People: Process Ratio – Track how many people are involved in core processes (e.g., onboarding) to spot inefficiencies.

🔑 Good Team Performance Metrics

1. Team Goal Delivery – Measure planned vs. actual delivery rates for goals (e.g., OKRs). Split this by operational and strategic initiatives.

2. Team health - Measure de-motivators and to what extent the teams’ environments set them up for success.

3. Meetings Survey – Evaluate meeting formats, efficiency, and relevance through surveys/Miro/Figma boards.

🔑 Good Business Performance Metrics

1. Revenue Per Employee – A common metric for tracking efficiency, though it might not fit smaller, early stage or specialised orgs.

2. Customer Retention or Churn – Tied directly to business impact and team performance.

3. General Administrative Burn Rate – Measure total people costs (salary and taxes) minus revenue.

🛠 Guiding Principles For Selecting The Right Metrics For Your Organisation

1. Link Metrics to Business Goals: Align every metric with what moves the needle for your company’s objectives.

2. Avoid the Output Trap: Busy people aren’t always productive people. Measure impact (e.g. delivery on goals) instead of activity (e.g., hours worked).

3. Use Scorecards for Accountability: Weekly scorecards (EOS framework does a good job here. See Resources section below) help track key metrics. If a metric is red for three weeks straight, dive into root causes and address them.

🧠 Step Plan: How To Start Tracking The Right Metrics For You

1. Align with Leadership: Define shared priorities and decide which areas need focus.

2. Conduct a Gap Analysis: Where is your team underperforming? Where is time being wasted? (we wrote about that last week)

3. Prioritise Metrics: Choose a small set (3–5) of critical metrics that truly reflect performance and productivity.

4. Experiment and Refine: Test metrics for a few months, gather feedback, and iterate.

💡Pro Tip: Want a free Loom review of your draft metrics or feedback on your approach? Reply to this email—we’re here to help!

✅ Key Outcomes

• Better Metrics Selection: You’ll identify and implement metrics that align with your business goals, focusing on impact rather than activity or busy-ness.

• Clearer Performance Tracking: You’ll gain clarity on how to measure both team and organisational performance effectively, avoiding common pitfalls like output-based metrics.

• Improved Alignment: By involving leadership and linking metrics to business priorities, you’ll ensure company-wide buy-in and focus on what truly matters.

• A Scalable System: You’ll have a repeatable, adaptable framework for refining metrics over time, ensuring they stay relevant as your organisation grows and evolves.

• Data-Driven Decision Making: With actionable insights from well-chosen metrics, you’ll be equipped to tackle inefficiencies, improve outcomes, and drive measurable business impact.

📚️ Good resources relating to this problem…

📘 5 Steps To A Great Scorecard [EOS]

📊 peoplemetrics.fyi [Open Org] –benchmarking platform for Scale-up people and talent metrics.

📘 Lean Metrics Overview [Planview]

📘 Startup Performance Metrics [Carta]

🤓 Want to Get Your Current “People Problem” Featured?

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🖤 John & Adam

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With 🧊 & 🔥 

John & Adam

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