Let’s get this out of the way up front. If used correctly, metrics can help an organization stay focused and push towards new goals. I will not dispute this point, so please don’t take the rest of this post as a rant against metrics and measuring your results. That being said, I’ve always had an uneasiness about the way job metrics are used in many organizations. You must close 100 tickets this month or you don’t get your bonus. Your commission is based on gross sales so close as much as possible. Maybe those metrics intuitively make sense, but it’s how your organization uses them that can determine if the metrics are helping or hurting your company.
You may be looking at the numbers above and wondering what could go wrong, they seem like valid things to track and measure performance. In the first example, what happens if it is a slow month and there aren’t tickets to close? Is it on the person in the support role to go and find more tickets? What if one of the employees cherry picks all the easy tickets leaving the more difficult tickets to another employee. So the person adding less value to the organization is going to be better compensated for their work? What do you think this is going to do to your more valuable employee? What about your company culture? In the second situation, what happens to your company profit margin? If the sales goal is strictly to get as much business as possible, is this sustainable business? Can you properly execute on it?
These are questions that have long bothered me around performance metrics, but given the value I can see when the metrics are used correctly I haven’t been able to articulate how to deal with the dichotomy of my thoughts. That’s why recently while reading The Year Without Pants by Scott Berkun (very good read fyi) I about jumped out of my seat when he made a mostly passing reference to the idea of having a data influenced culture as opposed to a data driven culture. What’s the difference? Why should we make the distinction?
Look at the above examples. In a data driven culture the only thing people care about are the numbers. Many times middle management will live and die by these numbers so they push their employees to hit them, no matter the cost to the company. A similar example is in education right now with all of the required standardized testing. School districts get punished if their test scores aren’t high enough, so what do they do? They take valuable teaching time and teach students how to take the test and teach only the material they know will be on the test. Does this seem like a valuable use of our teachers’ times? Does it seem like the best way to prepare the next generation for the world we live in? Of course not, but it is the way things are done simply because that’s the metric they are measured on.
A data influenced company may still have many similar metrics, but uses them as one piece of the puzzle. They would look at that employee that is closing 5 times as many tickets as anybody else and try to figure out why. Then if it is because of something good that employee is doing, share those findings with the rest of the group. If the results are skewed, they address the situation. A data influenced organization would use standardized test scores as one metric to gauge performance of a school. But they would also understand that some students learn different than others, so maybe their progress can be measured in other ways. A data influenced sales organization can use gross sales as a metric for commissions, but that needs to be balanced with profit metrics and making sure contracts can be executed.
Use data to help make decisions, but don’t become blind to the numbers. Always look at your numbers within context and if a metric becomes stale or doesn’t seem to be driving performance, re-evaluate it to see why and if things can be tweaked. At a minimum, keeping this idea in the back of your mind can help you step back and look at the metrics being used to make decisions. Trust your organization to be data influenced as opposed to data driven and you may be surprised with the quality of decisions that come out of the group.