A few years ago, I served on the board of my daughter’s school. One of my committee assignments was for the commencement of a ‘green’ initiative on campus. After six months of meetings, we were nowhere near figuring out what we wanted to do. One day, in frustration, I said “why don’t we just jump in and show some progress?!”
Sitting next to me was the CEO of the largest travel site on the web. He looked at me in wonder and asked, “If we just do it, how will we measure our success?” He went on to explain that in his company, no strategies were ever implemented unless there was an agreed-upon metric; how do we measure the initiative’s success.
Of course, truer words were never spoken. Since then, I’ve made that directive my own. At Thanawalla Digital, we don’t undertake any new campaigns without also defining how we will gauge its success. We use that same rubric to improve the process each year. But yet, there is a silent, insidious bug in this approach.
The problem arises in an ill-thought-out metric. That is, if you mistakenly measure the objectives when you think you are measuring strategy, your campaign could be disastrous to your company. “People have a behavioral tendency…to confuse what’s being measured with the metric being used” say Michael Harris and Bill Tayler in the September 2019 issue of Harvard Business Review: “Companies that work hard on their strategies and carefully monitor their progress often run into spectacular trouble.”
They go on to describe the fiasco at Wells Fargo…employees opened 3.5 million credit and deposit accounts for customers without their consent. The metric being measured was “how many accounts are we opening?” without any reference to underlying strategy (or whether the underlying strategy was even legal).
Many times, the details of a campaign are left for line-personnel to build and execute. That is, how are you going to open 3.5 million new accounts? If all you do is measure the result, and care little for the underlying strategy, the results are bound to be dismal or even disastrous.
You have, no doubt, heard some tell-tell signs of this within your own company. When managers and decision makers use words such as “just fix it!” they are abdicating their role in defining the ‘how’ of the ‘fix it’.
Today’s analytics engines are spectacular. They can measure and chart vast amounts of data and execute reports in-the-moment. The challenge for management is to ask the detailed questions on what you are measuring. Are your metrics telling you which levers to pull instead of simply how close you are to your goal? If not, you are failing as a leader. Dig deep. When you are presented with a pretty chart or a table, ask the next question: It’s fine that performance is tracking to the right & up, but what are the underlying strategies, and how are we specifying, communicating and measuring those underlying strategies. This next level of interrogation is where you will recognize if your analytics are aiding or failing you.