Stay Focused on the Goal, Not the Metrics

The goal is the thing you are trying to do.
The metric is how you are measuring your progress toward the thing you are trying to do. Metrics are only as good as their ability to measure progress toward the goal.

Don’t confuse them.

An Example

Imagine a sales team for an organization selling widgets has a goal to increase sales of a particular product line by 10%. The Sales Manager decides that the best way to achieve the goal is for the sales staff to make a certain number of cold-calls over the following months. After a few weeks, one of her sales staff is falling way behind in cold-calls. The wrinkle is that this salesman is the top biller in the department. Should the sales manager berate her top performer for not doing enough cold-calls?

Absolutely not. No manager should ever punish their reports for doing well (provided the means used are legal and ethical of course).

Punishing the salesman would send the message that billing isn’t the goal, but cold-calls are. Do you want a salesman who makes lots of cold-calls but can’t bill? Since sales staff are compensated via commission, punishing the salesman would introduce a division between his performance and his pay. In the best case, the salesman simply ignores the manager and continues to bill and get paid–benefiting the company in the process. In the worst case, the salesman leaves the company for greener pastures, depriving the company of it’s top biller.

The mistake here is that cold-calls are simply a form of measuring progress toward the goal–increased sales. Cold calls themselves are not the actual goal–they are a proxy for the goal. Further, they may not be the only possible proxy. Their value as a proxy is proportional to the relationship between cold-calls and increased sales. If a salesman is generating increased sales without cold-calls then there is either another possible metric or cold-calls are a poor metric.

It’s one thing to say that cold-calls are a proven way to generate increased sales. It’s quite another to ignore that there are other possible ways to do the same thing. It’s flat wrong to take the position that cold-calls are the only way to increase sales.

What is the appropriate response? Find out how the top biller is selling so well without cold-calls. Is the top biller doing something that no one else is doing? Is there something for the other sales staff to learn? Are there new, better metrics that can be introduced? Of course, it’s also possible that the top biller could bill even more if he did more cold-calls. Finding out will require collaboration between the salesman and the manager–but this is a process of active investigation instead of passive authoritarianism.

If the manager focuses on the metric instead of the goal, she is taking on the responsibility of having all the answers and dictating them to others. The proper approach is to adopt a learning stance toward the team’s work. If the team is doing well but the metrics aren’t being met, what can the manager learn from this? If the team meets the metrics, will they do better? If not–what good are they?

Choosing Metrics

When choosing metrics it’s important to consider that people will game the system. If you’re a software engineering manager and you make Lines of Code or Test Coverage the metric, people will write verbose code and create meaningless tests. A good metric will encourage people to game the system by focusing on the thing you want to achieve. I recently heard of an example in which the Product Owner threw out story sizing as part of their Scrum process. The only thing developers got credit for was the number of stories they completed. It didn’t matter how large or small–credit was only given when the story was completed an in production. The developers began gaming the system by reducing the story size to the smallest thing they could deliver.

Perfect.

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