Tuesday Post: Measure What Matters

Happy Tuesday!

Every Tuesday I'd like to offer strategies for the week ahead and a thought to fuel your action.

Why do we measure our businesses like we check our weight—obsessively tracking the number while ignoring everything that actually creates change?

Most wealth management firms have fallen into what I call the "bathroom scale trap." They step on the revenue scale every month, see a number they don't like, and then wonder why staring at it harder doesn't make it move.

However, here's the counterintuitive truth: the companies that achieve the most sustainable growth often spend less time measuring outcomes and more time measuring the activities that lead to those outcomes.

In our industry, we love to measure outcomes—such as revenue per client, net new AUM, and similar results. But what we rarely measure are the activities that directly lead to these outcomes. Metrics like the number of client interactions, length of client meetings, or frequency of proactive outreach often feel uncomfortable to track. It can seem like micromanagement—like we don't trust our professionals' judgment.

But the reality is simple: We're human. Humans struggle to stay true to goals without clear, consistent measurement. If you doubt this, consider your New Year's resolutions. How many did you stick with? Most of us don't even remember what they were.

In our family of companies, we have several divisions. Each division has its own distinct set of metrics. One division experienced rapid growth, far exceeding industry norms. Another grew slowly and steadily but more in line with the industry average.

I clearly remember sitting in our weekly meeting discussing these metrics. The air was thick with tension. We were analyzing one division's stagnant AUM growth, and the conversation quickly became personal. Team members became defensive, hearing criticism rather than constructive dialogue.

In that moment, the tension crystallized into an emotional memory I'll never forget. One advisor, someone usually calm and confident, leaned forward, visibly frustrated. He said quietly, almost reluctantly, "It feels like you're suggesting we're not working hard enough." The room fell silent. His words hung there, heavy, uncomfortable. I realized something crucial in that moment—people take metrics personally because behind those numbers lie their efforts, their reputations, their identities.

However, the deeper problem was that our metrics were outcome-based and reactive rather than proactive. They showed us what had already happened but gave us no insight into what needed to happen differently. This realization shifted my thinking. It wasn't enough to know we weren't growing; we had to understand why.

Metrics shouldn't be personal indictments—they're guideposts. Great metrics aren't just for leadership; they're valuable tools for everyone, creating clarity, accountability, and a sense of shared purpose. The FutureProof Advisor knows this: measuring what matters isn't micromanagement; it's about repeatability, clarity, and improvement.

Many companies announce metrics as though they're New Year's resolutions—big, aspirational goals introduced with fanfare, then forgotten until year-end evaluations. Without sustained resources, accountability, and cultural reinforcement, these metrics become meaningless. It's like installing a speedometer in a car that has no gas and flat tires—you'll measure speed endlessly, but you're going nowhere.

Measuring activities doesn't have to be intrusive. A great chef meticulously measures ingredients—not because they're being micromanaged —but because precision ensures a delicious and consistent outcome. It only becomes suffocating when someone stands over their shoulder, questioning every pinch of salt.

The further disconnected daily actions feel from larger metrics, the less meaningful those metrics become. Think of it like managing your personal finances—when you watch your savings grow incrementally, every small deposit feels empowering. But if you could only check your balance once a year, your daily spending would seem disconnected from your financial goals.

When considering a new metric, ask yourself a crucial question: "If this metric changes, what specific actions will we take?" If you can't answer this clearly, don't measure it. Imagine your doctor ordering a complicated blood test but having no plan to treat you differently, regardless of the results. You'd rightly question the point.

The most impactful businesses strike a balance between predictive and outcome-driven metrics. Just as we track daily steps and heart rate (leading indicators) alongside weight and blood pressure (outcome metrics) to assess overall health, businesses need both leading and lagging indicators. This balance allows for proactive adjustments and clearer insights into what's truly driving performance.

Here's the truth: there is no perfect metric. Metrics are simply tools to help us see reality clearly, allowing proactive changes instead of reactive scrambles. Even the best metrics evolve as our businesses change. Metrics won't always guarantee desired outcomes, but they can prevent us from being blindsided by unpleasant surprises.

Companies that measure what truly matters become forward-looking. They're less reactive, more experimental, and better equipped to adjust course quickly. That's not utopian thinking—that's just good management.

Ultimately, measuring what matters is about clarity, foresight, and genuine impact. It's about creating a culture where metrics are welcomed as tools for empowerment rather than feared as judgmental evaluations. That's the kind of environment that FutureProof Advisors strive for every day.

And it's absolutely achievable in wealth management—if we're willing to measure what truly matters.

The best is ahead!

-Matt