• Jul 03, 2015
• Comments Off on Three Mistakes with Metrics
• Lavery McGlynn

Three Mistakes with Metrics

Earlier this year Martin Klubeck, author of Metrics: How to Improve Key Business Results, wrote a post on three ‘dangerous’ mistakes with metrics. His point was that there are some common Performance Measurement mistakes that can genuinely be harmful to your organisation. In the era of ‘big data’ I agree that it is more important than ever to be careful with what you measure, and what you do with the gathered results, so here are my three things I beg you not to do with metrics:

Don’t let data drive your decisions

‘Data Driven Decisions’ is a term that has permeated so many books, articles, blogs and presentations on Performance Measurement, but it is misleading. Your decisions should not be driven by data, they should be informed by data.

Your KPIs and measures should play a significant role in your decisions – of course they should, otherwise what is the point of measuring them? They should be used to gain insights, and inform decisions but they should not be the driver behind the wheel. To stay with the analogy, think of your measures as your GPS. You can let it help you to get where you need to go to, but you don’t drive into a river just because it tells you to!

Don’t stare too hard at the numbers

Some of the managers and leaders that I work with often feel like their lives revolve around numbers – improving customer satisfaction ratings; increasing sales; improving efficiency and so on.

By focusing hard on the numbers, you will encourage your staff to do the same, and end up ‘chasing data’ rather than seeking improvements. Remember to look at the goals behind the measures. Don’t elevate your measures to be what you are trying to achieve, rather than using them to tell you if you’re on your way to your destination. Measures help us determine if we are on the right path, but if we focus too much on these measures we’ll forget where we were going.

Turning Targets into Goals

Again, this is a very common mistake. Managers often try to encourage staff to get involved in overall company goals by setting smaller targets on measures of success – the only real target is achieving the goal.

This is probably easier explained by an example. If my company’s goal is to become an industry leader in customer service, we would identify some clear measures of success to tell us if we’re on route to our goal. We could measure the time it takes to respond to a customer; and the time it takes to resolve their problem or deliver their product. These would all be good indicators of our progress, and the near-automatic response of managers may be to put individual targets on each of these measures. They may even go so far as to make them moving targets, where we aim to improve by a certain percentage each year.

By doing this, we elevate those indicators into goals and we forget about becoming an industry leader. Staff will only know they have to achieve the targets. The logic is that if you reached all of these targets, you’ll be the industry leader – so what is the problem?

The problem is that you could surpass every target you have set and still not be the leader, because the indicators used to define the top could change. You will encourage decision making based solely on these targets, and perhaps even discourage ideas for improving customer service which don’t directly affect the targets.

Metrics and Measurement can be a minefield – so if you need help or advice on any aspect of Performance Measurement, get in touch.