After you start hiring, you’re likely to relinquish ownership of certain processes or functions of the business along with the corresponding metrics.

Here are some mistakes to avoid when you reach that phase.

Giving ownership to inexperienced team members

Don’t assign ownership of meaningful metrics to inexperienced team members. They don’t yet have the experience to make them move correctly.

Furthermore, in the interest of hitting their targets, they’re likely to abandon the process that you’re developing.

Metrics that aren’t specific enough

A metric must be very clearly defined before it is used for product development.

Brand new metrics

You cannot ask someone to take actions to improve a metric without a) at least some historical data to analyze and b) a baseline to evaluate your actions.

Metrics that don’t mean much

Two potential mistakes here: metrics that are correlated but not causative and vanity metrics.

Tracking metrics that are too tightly correlated or dependant is inefficient. For instance, tracking the number of loyalty points your customers earnt isn’t very good because it is directly related to how much they spent. Therefore, you should track their spending.

Vanity metrics look nice but are an incomplete indicator of the company’s health. They sound good to investors and the press but aren’t very meaningful. GMV is a favorite among marketplaces. Many companies that touted their GMV left and right are dead now.

Not tying metrics to steps in a process

There must be metrics, and targets, for each step in a process, not just the result.

By optimizing each step, the process, as well as the end result are improved.

Unrealistic

Unachievable targets are demotivating. They are also bad indicators of a person’s performance.

A useful exercise is to note and analyze targets that you realize are unachievable only in retrospect. This will help you get a feeling for your business and how different metrics are related.

Targets that cannot be controlled directly

Targets that they either cannot control directly depend on other factors can also be frustrating.

For instance, having to depend on another department when their targets are not aligned with your goals.

Unilaterally setting them

There’s no point in anyone setting them unilaterally because there is rarely an entirely isolated target.

Looking at targets in isolation

Almost all targets affect and are affected by others.

For instance, sales might have hit or exceeded their targets one week, but marketing had a successful marketing campaign at the same time.

Not tied to a goal

It’s crucial that you clearly define the purpose of the target. Not only must the target be hit, but the spirit of the target must be fulfilled as well.

Increasing the number of suppliers is a frequent target. However, just increasing the number is insufficient. The goal that this is in service of must be clearly defined.

In the beginning, this is likely to be only an increase in catalog variety. Later, however, this target must be qualified better. For instance, the goal might be to improve the product spread between categories. An even more specific qualification might be to increase the number of products in the “Cleaning” category.

Targets that can be influenced too directly

Targets that people can change themselves are meaningless.

For instance, if you’re tracking marketing spend the team can just increase their budget.

Or if you’re tracking the number of loyalty points issued the team could just increase the conversion rate.

Not having a complete set of metrics

You cannot represent your business by a single number.

There must be an entire set of metrics that represent various aspects of the company’s health.

These numbers must cover the performance of each department. That performance must then relate to the financial health of the company.

Not taking into account quality

Targets that do not take into account the quality of the result are often misleading.

For instance, targeting just the number of suppliers can be deceiving. They may be unsuitable suppliers that don’t even finish onboarding. Or there might be ones that have products that aren’t selling. Or in categories where you already have good coverage.