Here’s a Problem With Metrics

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Here’s a Problem With Metrics post image

A few weeks back, I was on a call with Ian. We were discussing how to best manage our team.

He asked, “What numbers are we tracking? What specifically can we ask our team to improve?”

The “numbers” Ian was referring to are KPIs, or “key performance indicators.” They’re an essential part of any good business.

Some management theorists will tell you that they’re also the essence of good management – that leading well means giving smart people smart KPIs and getting out of their way. I tell my staff, “Increase quality leads by 20% in the next quarter!” Then I approve the budget and let my people do their thing.

Except that in the real world, it doesn’t quite work like this. Here’s the problem.

If you task busy people with difficult and important new goals – like increasing quality leads by 20% over a quarter – you’ll often underestimate the amount of time and investment a sustainable approach to that goal will take. Your staff might feel the pressure and take shortcuts, sacrificing long-term goals to the short-term goal you’ve just created.

Let’s say my team member agrees that increasing leads is important, but isn’t sure how to make it happen. So they procrastinate for a few weeks and continue running the business as usual, “fighting fires.” A few weeks later, with the quarterly deadline approaching, they realize they have to do something fast. So they decide to install high-pressure pop-ups in order to meet their goal. Or they cut a costly deal with another company for leads of unknown quality. Or…

Yes, you want 20% growth, but not at all costs. Sure, you might meet your short-term goal, but in the meantime, you might sacrifice something broader, harder to define, and ultimately more important. (This is exactly what happens when public companies get trapped by shareholder demands for quarterly profit increases.)

So back to the story and the reason for this article. I’m having this conversation, debating the value of our KPIs with Ian, when I have to bail out to eat lunch with Taylor Pearson.

Taylor is a productivity expert, and we spent most of our conversation (which will be on the podcast this week) talking about exactly these kinds of productivity trade-offs. One of Taylor’s strategies spoke to exactly the problem I described above. He said, “Plan with goals, build with habits.”

This simple mantra changed the way I talk about KPIs with my team. Why?

Habits are regular, repeated actions. They are the human version of organizational processes. If your team develops effective habits, they can turn them into profitable processes.

I shared Taylor’s idea with a member of my team, and it led to a productive conversation. We realized that we need to create a safe, protected time to enact ‘habit experiments,’ rather than being reactive and taking shortcuts when we’re under the gun.

Back to our earlier example, then: my team member’s KPI is to increase leads by 20% this quarter. Which habits might lead to that result? How long will it take to develop these habits?

Then, when my team member and I have agreed on a habit to experiment with, I encourage  them to make space first thing in their day to ensure that the habit gets executed. Don’t pick up the phone. Don’t respond to email. Run the habit experiment.

In your business, the habits you experiment with will be different. Maybe it’s making 10 cold calls, sending 20 cold emails, writing 50% of a blog post, recording a podcast, or finding a way to thank one high-value client.

But once you’ve begun your habit experiment, leave it in place for a few weeks. (Any good experiment requires a meaningful sample size.) Then, collect your data and ask whether your new habit is moving the needle.

If your habit experiment helps you reach your KPIs, then the habit becomes a process – which you can easily hire for.

The overall process looks like this:

  1. Define a KPI.
  2. Set a timeframe for your KPI (ideally, less than 90 days).
  3. Brainstorm potential habits that could help you achieve your KPI.
  4. Execute the habit on a daily/weekly basis.
  5. Check the results.
  6. If the results are positive: break the habit into steps, write it out as a process, and  (if possible) hire somebody to execute it.

Bottom line: Goals are nice, but habits are what gets it done.

What do you think?

Cheers,

Dan

PS, if you like the TMBA, you can subscribe here.

Published on 05.02.17
  • http://TimConley.co Tim Conley

    What you’ve described is abdication and not delegation.

    Most founders run into this problem. They are doers and then they hire and assign tasks. They then forget about what they assigned to go do their own thing. If they remember what they assigned, it is usually much later and a few things could have happened:
    1) nothing,
    2) incomplete work,
    3) wrong work (not what the founder had in his head),
    4) completed, but without the results the founder wanted, and
    5) miraculously the employee does the work perfectly and gets great results.

    Fixing the delegation problem isn’t complex. It starts with the founder stopping the assigning of tasks and shifting to defining roles and responsibilities that support the company vision.

    Employees should be able to assign their own tasks based on the what their roles and responsibilities are in the company.

    Next, the founder needs to work with his team instead of treating them like computers that get fed code and then spit out a precise result. When you treat employees and contractors (and even vendors) as part of a cohesive unit, mission objectives get easier to complete.

    The best part is the company stops being limited by the founder and his task and KPI assigning. The company then is limited by the vision of the founder and his leadership team (topic for another time).

  • http://www.tropicalmba.com/ Dan Andrews

    appreciate this Tim! I agree with a lot of this and am using it in ongoing conversations with the team.

  • http://www.tropicalmba.com/ Dan Andrews
  • http://TimConley.co Tim Conley

    Two of my articles on delegation that might be useful to this thread:
    http://timconley.co/trust-but-verify/
    http://timconley.co/simple-delegation-tool/

  • http://johnathansolorzano.com Johnathan Solorzano

    I couldn’t agree more, thanks for the good read guys.

  • Reader

    The problem with extremely KPI focused jobs like customer support is that it’s oversimplified and tends to squeeze people for maximum productivity until they burn out.

    It’s obviously important to measure and talk results, but unless someone is way off the average, one should just assume that they’re doing a reasonable effort and aren’t looking to get paid for doing nothing.

  • http://www.tropicalmba.com/ Dan Andrews

    agree want to avoid burnout for sure (and to inspire /aspire to think outside of the numbers and develop good judgment).

    perhaps my example made it sound pretty small time, but even president’s identify, look at, and hold them selves accountable for KPIs… I’d probably re-write the article a bit given the feedback but the most useful bits in my own conversations have been 1) identifying/evaluating useful metrics and 2) considering / developing quality habit experiments in the organization or personally.

  • http://www.tropicalmba.com/ Dan Andrews

    cheers it’s our pleasure

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