What do C-suite executives, supervisors, and managers of teams of all sizes all have in common? A fixation on metrics.
Derived from company strategy and overarching goals, metrics are by far the most popular way of evaluating overall company performance and effectiveness in reaching those goals. The actual metrics measured may vary—net promoter scores, sales, leads, etc.—but the obsession with metrics as a concept has remained unchanged for decades. Employees at all levels of the company tend to stick to the mantra, “What gets measured gets done.”
However, there’s another quote that rings equally true, from Jerry Muller, author of The Tyranny of Metrics: “Not everything that is important is measurable, and much that is measurable is unimportant.”
Metrics can help us stay focused on goals, but they can also be dangerous.
For example, an overdependent, obsessive attachment to performance indicators can make organizations rigid, short-sighted, and dismissive of innovation. We tend to hyper-optimize for our most important metrics, aiming for the fastest, cheapest way to hit our goals—a sure-fire way to create employee burnout and a toxic culture.
So how do we balance the benefits of measurement with the dangers of metrics fixation? It requires a mindset shift.
Understand that metrics can’t give us the complete picture
It’s tempting to rely solely on the metrics that are easy to measure, but we must remember these often don’t give us the full story. We even did a test to prove this at PartnerHero.
We gave two teams the same task—create widgets—but took a different metric approach with each group. Team 1 was told their metric for success was 40 widgets per hour per person. Team 2 was simply told to create as many as they could per hour. At the end of the test, the majority of the first team hit exactly 40 widgets per hour. However, the majority of the second team created over 45 widgets per hour. They performed better without a rigid metric to pursue. As an added benefit, they also produced more ideas for improvement and shared them among each other.
If we look solely at Team 1, the metrics tell us we were successful. But what they don’t tell us is we were not as successful or as innovative as we could have been.
Data around reputation, loyalty, trust, satisfaction, and more are also not so easily captured, and may even be misleading. Consider an employee who performs magnificently in front of a tough client but gets a lower feedback rating. Their manager should celebrate the behavior rather than react to the metric.
Leaders at all levels should create a culture in which their teams fully believe in the main strategic goals. For example, if your employees truly value creating a positive customer experience, the metric surrounding it will automatically improve without the need to hyper-fixate.
Metrics in their current state also too often focus on costs and profits, not people. However, people are an integral piece of our success, and we must put them above all else. From professional and personal growth to inclusiveness and sustainability, we must shift our metrics to provide us with a clearer picture of true success.
Build a sense of trust
How do you build a culture in which your team buys into the goals and feels intrinsically motivated to perform at their best? The answer is complicated, but it absolutely starts with trust. In most organizations, trust is measured by tacit approval and execution of plans or a lack of discussion or even disagreement on the goals to be achieved. That is not trust, that’s obedience.
Trust, at its foundation, is about safety. A far better measure of safety is how willing people are to “speak truth to power,” to disagree with an idea or directive issued by leadership. Trust is built by finding areas of disagreement and contradiction and engaging in deep, authentic examination of the countering views, and having a willingness to let ideas win over authority.
What does this look like now? The pandemic has created challenges in our working world and our personal lives. Removing the fear of asking questions or speaking up is powerful. An employee can ask questions to help them pivot if needed to achieve a goal, or even more importantly, they can come to leadership if they are experiencing something personal so they can get the support they need.
With a high level of trust, the “why” is more easily bought into. Your teams must trust that the metrics set are simply helpful guides, not rigid stakes in the ground that determine their paychecks and their trajectory in the company. There must be room for failure, experimentation, innovation, and most importantly, questions. Invite those you manage to question why a certain metric is important and how it might impact the overall business goals. Encourage them to be part of the growth process without fear of retribution. Through those questions, you may even uncover blind spots in your current metrics and/or find better, more accurate metrics to assess.
Prioritize feedback and flexibility
It is incredibly easy for metrics to create a false sense of security. Take Peloton, for example. The company was clinging to a near-rabid fandom as evidence of their success and acted with a sense of impunity when serious issues started to surface. When regulators first started to question the safety of the company’s treadmills, they doubled down on the strength of their brand and attacked the agency and the veracity of the reports.
“But Peloton also inspires a deep affinity, with a community of hundreds of Facebook groups and a popular Reddit forum. There’s a subgenre online of people describing how they were converted into Peloton fans,” writes Todd C. Frankel in a recent report in the Washington Post.
By early February, the stock fell almost 70% from where it was six months ago, the CEO is being replaced by the board, and nearly 2,800 employees are being laid off. What’s important to note here is that the employees working in marketing and manufacturing knew of the issues the company was facing, from slowing sales to unsafe equipment—they simply were not empowered to make the right decisions when it mattered most.
Leaders must avoid blindly trusting their own created set of metrics, and instead prioritize open and frequent feedback from employees at all levels. Allow them to poke holes in the metrics that were set without backlash. Encourage them to find new gauges of performance and customer satisfaction. And of course, follow it with a willingness to be flexible. Once it becomes clear that our set metrics are no longer showing us a clear picture of the market or our customers’ needs, we must change course.
Shervin Talieh is the founder and CEO of PartnerHero.