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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | APRIL 23, 2003 ENTREPRENEUR'S BYLINE By Martin Babinec The Measure of Your Management A maturing business encounters problems no startup ever dreams about. This entrepreneur's solution: executive metrics
Take TriNet Group, the company I founded in 1988 with a single employee: my wife. Subsequently, I hired top talent in human resources, operations, and finance. For a long time, my small band wore multiple hats: they were employees and managers as well as executives, and their battle plan to was find customers, keep them happy, and prevent as many baths in red ink as possible. Cut to fast growth: In the late 1990s, TriNet ballooned to 350 from 100 employees and scored five consecutive placements on Inc.'s list of the country's fastest growing private companies. It was then that I realized my executive team needed to change as well. As our company became financially stable, the "fight hard, survive another day" mentality could give way to problems of another sort: complacency, departmental infighting, and executives who might no longer be able to perform at the required level. EXECUTIVE METRICS. Those, of course, are the classic problems besetting mature companies. Unchecked, they could cause a once-nimble entity to be overtaken by more agile competitors. It was that scenario that I wanted to avoid. In short, I wanted TriNet's executives to be as fast, fresh, and alert as they were during our early stage. And to assure that, I turned to a specific tool: metrics. Although creating an executive "dream team" is more of an art than a science, we have learned that metrics can help quantify the results as a company matures. At TriNet, we establish metrics for each member of our executive team, a process to which the entire group contributes. Individual executives take complete ownership of the numbers for which they will be accountable, using them to evaluate members of their own staffs. In addition, the executive group uses the metrics to establish goals and make decisions about how best to achieve critical results. Metrics, in other words, enable executives in a mature company to be proactive about creating and communicating shared goals. No longer do executives have the luxury of relying on free-form management to help employees avoid complacency, infighting, and becoming victims of the Peter Principle -- being shunted into jobs for which they are ill suited. CONFRONTING COMPLACENCY. Metrics help combat complacency by keeping the focus on constant improvement. At financially stable companies with no threats on the horizon, guerilla outfits get stowed away, and it's all too easy for executives to succumb to inertia. Look for the warning signs: meetings following routines with no significant outcome, a focus on appearance rather than substance, and form and process valued more than results. With a shared set of relevant metrics, leaders cannot simply relax into their titles and roles, coasting on momentum. At each reporting period, they must answer for the numbers they've agreed to achieve. These include not only the company's overall results, but also those pertaining to their own departments and functions.
 Entrepreneur's Byline comes to BusinessWeek Online readers courtesy of EntreWorld.org, a resource for entrepreneurs that is sponsored by the nonprofit Ewing Marion Kauffman Foundation. Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | APRIL |
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