Making Sense of Metrics

Most of us utilize metrics in one form or another.

For better or worse, they potentially become the focus of our day-to-day behavior.

However, when metrics begin to conflict with our core values and long-term sustainability — it is time to rethink their power to drive your organization. In many cases, chosen metrics can develop a “dark side” that can spell trouble for your organization.

As reflected in this post at HBR, “…the wrong performance metrics will undermine good intentions every time.” In that regard, consider how your team utilizes them. Do the metrics you monitor offer the information your team requires to move forward? Are they pulling their weight?

On a very basic level, metrics should reflect key facets of performance, while supporting both mission and vision. However, they can fail to help us identify developing issues.

Let me offer an example.

Recently, I spent time with an organization that was grappling with metrics that was not helping them to evolve and secure market share. While they kept a close on eye on sales data and leads funneling into their system — there were relevant performance criteria not captured in their set of monitored metrics. (Here, late project changes occurred months after the original contract.)

When they pulled back “the curtain” on sales performance, it was clear that this information had not been actively acknowledged. As such, the team was not alerted to the pattern of costly fixes that would develop down the line.

An oversight such as this develops when performance effectiveness is not fully considered as metrics are chosen. Identifying facets of successful performance must occur first — then the metrics to parlay that information are identified.

We often become comfortable with aging or incomplete set of metrics, because they are available. However, these choices are critical, because ultimately what is measured — is valued organizationally.

The simple act of choosing a metric can ignite a cascade of behavioral expectations, which may or may not contribute team success or the benefit customers. (For example consider the goal of closing sales quickly or monitoring the length of a customer center call, etc.) Furthermore, if metrics are chosen without considering the impact upon product or service delivery systems, serious ramifications can arise. (More on metrics and “performance perversity” at the VA, here.)

Reviewing the usefulness of your metrics at regular intervals is key.

Ask these questions:

• Are the metrics robust? Ideally, a set of metrics should represent the dynamic nature of the work that you complete. Ensure that all facets or your work are represented and that your collected numbers offer a broad view.
• Are they “change worthy”? As discussed here, data is often prevalent — but insights are rare. We might collect endless numbers (at a high cost in both time and resources), which actually offer few clues as to help us improve. Remember that data and metrics are two very different things.
• Do metrics direct behavior? Metrics are only as useful as the behavior they energize. When considering a metric, reflect on its power to truly impact behavior across functions. Be wary of “Vanity Metrics“, that can pack a powerful marketing message — yet do little to guide behavior.
• Are the metrics meaningful? While information needs to be readily available — it also must must capture something vital about your organization. For example, do metrics help your team connect with their work?
• Where are metrics focused? “Lagging” metrics report on states that have already occurred (lost customers, for example). “Leading” metrics, on the other hand, might help predict a developing problem and offer an opportunity to change a process mid-stream.
• Are the metrics dynamic? Metrics should evolve with the changing focus of your team. (You might utilize the 80-20 rule; where 80% of your metrics represent your current focus, 20% represent areas of needed future performance emphasis.) Outdated metrics can “muddy the waters” and cause a good deal of confusion concerning valued behaviors. Metrics can have an “expiration date” — when they lose their value to promote performance excellence.

Other considerations:

• Avoid the “single number” emphasis. Any construct worth measuring (such as sales effectiveness or customer service), is likely multidimensional. Ensure that your metrics reflect this.
• Consider who utilizes the numbers. The heaviest, most demanding users must be carefully considered when developing metrics. Discuss the needed information required to monitor the health of a department or function, frequently.
• Measure what matters, yet ensure they are easily understood. Metrics can become complicated quickly — but ultimately must be easily grasped. Your metrics should be informative and allow you to explain the crux of your business easily.
• Refine them. No single metric is a perfect representation of performance. Attempt to factor out “white” noise, that might limit real-time use. You might also consider combining leading indicators to form a clearer picture of performance.
• Share them. Metrics can help motivate others within the organization — so share the numbers with those whom might benefit the most. This will help team members align with the larger goals of the organization.
• Add a qualitative component. You cannot measure something that is completely out of your purview. Keep abreast of developing areas that affect performance and ensure you have a handle on the leading edge.

Dr. Marla Gottschalk is an Industrial/Organizational Psychologist. She is the Director of Organizational Development at Allied Talent.