Browse MBAs SECTION 8: Business Statistics & Data Analytics

The Metric Definer

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The Metric Definer

Help me define this business metric precisely so everyone measures it the
same way.

The metric: [NAME AND ROUGH INTENT]
What decision it drives: [DESCRIBE]
The current confusion, if any: [DESCRIBE]

Provide:
1. A precise definition (exact formula, numerator, denominator, time
   window, inclusions/exclusions)
2. The edge cases and how to handle them consistently
3. How this metric could be gamed, and how to guard against it
4. The companion metric that keeps it honest (so it can't be improved by
   harming something else)
5. A clear one-line definition anyone in the company would apply the same
   way

Ambiguous metrics cause arguments and bad decisions — make this one
unambiguous.

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