Guest author Martin Klubeck, author of Metrics: How to Improve Key Business Results, warns us about 3 mistakes with metrics that stem from too strong a focus on the data.

by Martin Klubeck

I really liked Stacey’s March 3rd newsletter on Five Traps to Avoid in Designing Performance Measures. I couldn’t help but think of the warnings I find myself giving to clients over and over again. Along with the five traps to avoid, I offer you three management mistakes which make metrics more dangerous than helpful.

#1 Making “Data-Driven” Decisions

This one is insidious in its ability to weave its way into everything you read. I’ve seen leaders give presentations on how they successfully use their data to drive their decisions. There are numerous book titles available on how to better drive your decisions with data. All of these scare me… a lot.

I never want data driving decisions. I want them informing decisions. Data, measures, and indicators are information we can use to gain insights. They are tools we can use to inform our choices, to inform our decisions. But they rarely tell the complete story and therefore shouldn’t “drive” the ship.

You’re probably going to tell me I’m being pedantic (taking words literally), and you’d be right. You may also argue that the difference between “drive” and “inform” is a nuance. Ok. You may tell me that it isn’t worth worrying about, and you’d be wrong. Even if you mean “inform” when you say “drive” – the workforce figures you mean what you say.

#2 Chasing Data

A customer satisfaction rating of 4.9 out of 5. An increase of 25% in sales. 70% improved efficiency.

These are numbers. As leaders, if you overly focus on the numbers, you will encourage your workers to follow suit and you will end up chasing data instead of seeking real improvements.

Especially as someone in charge, you have to keep your focus on the bigger picture, on the goals behind the measures. Too often we elevate our measures of success to become the actual thing we want to achieve instead of a way of telling if we’re reaching our destination.

In any journey we need to know where we are, where we want to be, and a plan for getting from here to there. Measures help us determine if we are on the right path, using the right mode of transportation, and if we will arrive when and where we wanted. If we focus too much on these measures we’ll forget where we were going.

#3 Turning Targets into Goals

This one is a special case of chasing data. It happens when leaders innocently try to help out by creating a target for those measures of success. If our measure involved tracking progress to the goal, we don’t need a target. The only real target is achieving the goal.

Say your goal is to become an industry leader in customer service. And let’s say we identify some clear (no weasel words allowed) measures of success to tell us if we’re getting there. We could measure our customer’s satisfaction with our service, the time it takes to connect with the customer, the time it takes to resolve the need, and finally the quality of the solution provided. These would all be good indicators of our progress. And many managers will want to put a target on these. They’ll even go so far as to make them moving targets, where we improve a certain percentage each year.

The problem is when we do this, we elevate those indicators into goals. The workforce won’t remember anything about becoming an industry leader. They’ll only know they have to achieve the targets. You may argue that if you reached all of the targets, you’ll likely be the industry leader, especially if you set those targets above the benchmark set by the current industry leader.

Unfortunately, this very logical sounding argument is wrong. You could surpass the competition in each indicator and still not be the overall leader, because the indicators used to define the top could change. Worse it would be wrong because you’d be encouraging the wrong behaviors. You’ll encourage chasing data and making decisions based solely on the targets. You will kill innovation and creativity. You will discourage ideas for improving customer service which don’t directly affect the targets.

If you truly want to achieve a goal, don’t put targets on the measures of success.

DISCUSSION:

I’m sure there are other things to avoid, what have you found to be the biggest problems? Weasel Words still top my list!