Measurement Mania

There is a well-known saying that?“what gets measured gets managed”.?Depending on your source, it was first said by either physicist Lord kelvin, or?Peter Drucker.

It’s generally true. After all, if you plan to run a marathon, you start by finding out what distance you can run right now. That’s the starting point.?To make sure you can finish the marathon, you figure out how many miles you must run every week between now and the race. And you track your progress. So yes, you manage what you measure. If you do it vigilantly, you will likely cross the finish line!

Scoreboards

Measurements are the scoreboard. That’s true whether you’re running a marathon, or measuring a company’s expansion of staff, or sales revenue. But keeping track of your running mileage is not the same as running. And when you set out to do a 5-mile run, the action isn’t happening on your?Garmin tracker or on your mileage spreadsheet.?It’s happening as your feet hit the ground, your breathing quickens and as sweat beads on your forehead. The scoreboard is not the activity it tracks.

This may seem like an obvious point—perhaps so obvious as not to need saying. But the distinction between the two—the activity and the measurement — is often murky.

It’s easy to see the confusion in both sports and business. Ultimately, the only thing that matters in a football game is who has the greatest number of goals at the end. But when you play the game, the goals are a component but not the only or even the primary component of the work.

The actual playing of football involves running, kicking, receiving, defending, positioning yourself to receive a pass, feinting to avoid being blocked, and also, kicking on goal. And of course, doing all of it while avoiding penalties, being off-sides, using your hands, or getting injured.

If you and your teammates do all of that well —better than the opposing team—then you score goals and win the game. But the score of the game doesn’t even hint at the reality of a game of football. Knowing that a match ended 2-1 is the least interesting thing you can say about any given game—unless you have a large stake on the final score and are otherwise uninterested. For all other purposes, that number is minimally illuminating.

Personal Data

But, in today’s age of big data, we are obsessed with measurement. You can see it everywhere.?Body hackers are measuring every physical function: Breathing, pulse, sleep quality and time, body fat, bloodwork, hormones, exact dietary detail and yes, much more.

Why? How can that trove of data improve bodily function? Can it?

Business Data

The same thing is happening in organizations. They are amassing metrics for every aspect of business. The number of new measurements is vast and growing. There are Key Performance Indicators (KPIs), Objectives and Key results (OKRs), sales metrics, functional performance metrics, individual milestones, digital measurements like impressions, hits, web traffic, lead generation and conversions. There are so many more that I could use this entire article just to list them.

Tech businesses are data hungry. But, so are tele-sales companies, fashion manufacturers, warehouses, importers, and fleet managers. This preoccupation with measurement can miss a fundamental point. If companies are measuring everything to the nth degree, teams and individuals can confuse the metrics for the game.

Sales vs Strategy

In sales, metrics function as a basic currency of status. Sales reps are as respected as their closing percentage is high. In (say) engineering, someone can be a brilliant coder but remain somewhat unknown. Their work is great, but because they are understated or introverted, the CEO or other executives may not realize it.

There is no such thing as a great sales person flying under the radar. Everyone in the organization is aware of every deal that closes. So the heroes of sales are those who close deals.

But when sales don’t happen, and the leader board is uninspiring, that metric becomes the story. Instead of observing the sales numbers and looking at all possible explanations, revenue leaders and CEOs see only one possible conclusion: The sales team sucks.

Blinded by the Score

Now sometimes, the sales team does suck. But other times sales may be languishing for reasons that have nothing to do with the skill or energy of the sales reps. Instead, there may be issues with the product, changes in a competitive landscape, or some other externality at the heart of the sales numbers.

But, because revenue numbers are so critical to a company’s health, it’s easy to get sucked into the vortex of believing that sales numbers tell you everything you need to know.

Sales is an easy target for this kind of analysis. But it’s not limited to sales. Sometimes the same thing can happen with customer churn. Or the speed of the product development. Or any of the many other department KPIs that are in general use.

Indicators Not Axioms

When we see measurements as fundamental truths rather than as signals we conflate the scoreboard with the game. The measurements then are, themselves, conclusions, rather than prods to inquiry.

That’s part of the problem with the proliferation of metrics. If you are swimming in a sea of data, you think the data is the water. It’s not. Even the smartest people get distracted by it though.

Instead of multiplying metrics, the solutions may be in reducing them. A very few, select data points can be illuminating. They can provide advance warning about imminent changes or competitive threats. They can suggest a need for training or a new process.

But to do that, you first need to very clearly distinguish what you are measuring and why. And that may be the hardest part of the process. Because in an environment in which it’s possible to measure everything, forgoing those data feels like a handicap. But it’s not. It’s a discipline that leads to better management and decision-making.

Get beyond measurements by providing your team with a testable, breakthrough strategy they can embrace, understand and drive. Schedule a call with me to learn about Beyond Better’s unique approach to strategic planning and people-centric execution.