Can you remember having one of those moments in your career when the ‘penny finally dropped’? Mine came relatively early on at a company-wide conference at Wembley Arena. ‘Cue stage lights, cue dramatic music’ and there in the distance at the centre of the huge stage was Jan Lescley the then CEO Smithkline Beecham.  Drawing on his experience in a former life as a professional tennis player, he said something that never left me, ‘…if you’re not keeping score you’re just practicing’.

In other words, if you’re serious about the business you’re in, metrics are going to be important. In the age of big data it’s never been easier to get a handle on the question ‘Are we winning or losing?’  This is rocket fuel to an organisation’s decision making process. However, there is a health warning that comes with metrics.  They must be handled with care. I’ve seen what happens when not enough thought and attention goes into selecting metrics.  Sometimes in pursuit of the numbers, behaviours are triggered that drain the humanity out of the organisation. So how do we create a metrics culture that strikes the right balance between the emotional intelligence of James T Kirk and the logic Mr Spock?

Here are 6 things a leader should avoid when developing metrics.

  1. Ignoring the impact that metrics have on behaviour:  What you measure can have some unintended impacts on team behaviour.  People can be quite creative. I remember observing with a sales team who’s weekly metric was simply number of contacts made.  They included contacts made with non-decision makers such as pharmacists who were relatively easy to get appointments with rather than the real decision makers (e.g. Doctors) in order to make their numbers look good.
  2. Data overload:  Having too many metrics will always lead to the analysis paralysis trap.  Clarity on the decisions the new metric will drive should be the first consideration.  Making sure the impact exceeds the time and effort spent on collection and analysis should be the second.
  3. Not thinking systemically Impact data in one group may be a source of tensions in for another:  The transportation group in a retailer was measured in terms of freight cost.  This may seem reasonable, but it led the group to search out the best deals in shipping, even if this meant that deliveries to the distribution centre would sometimes be early and sometimes late, resulting in frequent out of stock situations.  Always think of the impacts that your metrics might have elsewhere.
  4. Vanity Metrics:  We can be in danger of creating metrics that satisfy our personal needs rather than the customer. For example, manufacturers like to measure whether orders left on a scheduled date.  This may be of interest to the company, but the customer cares more about when they received their shipment not when it left the manufacturer.
  5. Making the data collection process overly complicated:  As a rule of thumb the more inexpensive and convenient it is to collect the metric the better. A story is told of a retailer who wanted metric that would capture the percentage of people visiting their stores and making purchases.  Elaborate schemes using expensive radio tags and sensors were looked at to measure conversion ratio.  In the end, they hired a couple of school kids to count the number of people coming into the store and those leaving with shopping bags.
  6. Frequency of metric collection:  When the timings for metrics collection is infrequent it’s hard to gauge whether your actions are having any material effect. For example, most companies do a 1x per year employee satisfaction survey and a measure of engagement. Rather than waiting 12 months for employee engagement insights, they could get more in the moment clues on engagement by looking at monthly absence and sickness data.

Metrics creation and the implications for Positive Deviant Leadership: In my work on leadership and change, I often draw on the principles of Positive Deviance. I think of Positive Deviant leaders as outliers on the winning side of the ‘normal distribution curve’ of great leadership.  Positive Deviant leaders recognise that solutions to organisational problems are often hidden within plain site amongst unusual suspects.  They aren’t just interested in what’s not working, they have a keen eye for what’s working where we might least expect it, moving on to create conditions for such innovations to thrive.  In the work of uncovering positive deviants the Positive Deviant leader must have an understanding of how to develop good metrics.

When you take a close look at the metrics your for organisation, how closely do they align to the 6 principles for creating metrics that sizzle? Are they driving the right behaviours?  Are you using your metrics effectively to identify sources of innovation e.g positive deviants?  Are you really keeping score or are you just practicing?

Contributed by Tony Belgrave, Associate Consultant, ChangePace Consulting Ltd.

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