Overcoming EOS Metric Mayhem

EOS metric overload? Discover actionable steps to simplify your metrics and help your team focus on real work.

“It is impossible,” scientist Werner Heisenberg said with his uncertainty principle, “to simultaneously know both the exact position and the exact momentum of a particle.”

In simpler terms, measuring something changes the thing being measured.

I saw this principle operating in Afghanistan. The 4-star general believed that the allies would gain the upper hand when “offensive engagements” outnumbered “enemy-initiated attacks.” This change, he believed, was a leading indicator that we were turning the corner.?

Measuring this distinction without a difference created incentives to classify an incident as an offensive engagement. After a few months, the metrics showed what the general hoped to see, even as success in the war was circling the drain.

Metric Mayhem

Gino Wickman Wickman’s Entrepreneurial Operating System (EOS) has helped many companies organize for success and develop metrics that boost accountability. As I noted last week, you have to customize the system to meet your needs rather than contorting your company to comply with it.

In addition to meeting madness, my clients and contacts complain about metric mayhem. Excessive metrics can lead to confusion, wasted resources, and diminished focus on what drives business success. When companies measure too many metrics or track irrelevant data, they can experience:

• Data overload by gathering input and assembling reports of dubious value. Data overload can obscure what’s vitally important for your business.
• Analysis paralysis results when leaders spend too much time analyzing data and looking for elusive leading indicators that tend to confuse correlation with causation.
• Mouse-turd metrics that cost significant energy to gather but have little relevance for strategic decisions.
• Resource drain as you buy analytic tools and hire analysts to deal with the overload and paralysis. After pivoting way too late, Sears went broke with metric madness as it tried to compete with Amazon.

5 Ways to Reduce EOS Metric Mayhem

1. Start small and simple. Profit margin, employee attrition, ideal customer retention, and brand reputation are an excellent start for strategic measures.?

2. Remove metrics that aren’t providing you with actionable insights. Just because you can measure a Key Performance Indicator (KPI) does not mean you should. Review your quarterly metrics and consider if each one makes the cut if you created new KPIs today.

3. Consider the perverse incentives. Do you have a version of what I noted in Afghanistan? Measuring the number of sales calls, for example, can create perverse incentives to call non-ideal clients so you can pad the numbers. Paying sales officials based on revenue while not considering profitability could drive you out of business. How many attorneys create unnecessary work for themselves to maximize billable hours??

4. Be careful with leading indicators. Past performance, financial professionals say, is no guarantee of future results. If the past were an accurate portrayal of the future, we would have already reached the end of history. Those who believe in leading indicators tend to reduce complexity to a silver bullet variable more predictive of false positives and negatives, correlation over causality, collection bias, and other problems.

5. Big judgment trumps big data (I’m paraphrasing Alan Weiss here). The search for data-driven magic bullets is information-age fool’s gold. Sometimes, you are better off evaluating than measuring. You can evaluate if leaders are becoming better problem solvers and employees are working better together, for example, more readily than you can measure these matters quantitatively.?

By honing in on the most critical metrics and streamlining data processes, companies can enhance focus, improve decision-making, and better allocate resources—ultimately driving better results without the burden of metric madness.

“Fanaticism consists of redoubling your effort when you have forgotten your aim.” – George Santayana

If you feel your company is experiencing metric mayhem, schedule a call so we can discuss your situation. I’ll give you action steps to implement immediately so people can work instead of spending their time measuring it.

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