Sunday, November 27, 2011

Metrics + No Consequences = Don't Bother

Regular readers of my blog will know that I have a keen interest in the area of metrics and their misuse.

This article pertains to project execution however there may some readers who see relevance in their day to day business environment.

Management guru Peter Drucker said, "What's measured improves". Whilst I agree with the sentiment, my view is that creating metrics (measurements) is a futile exercise if there are no consequences, should the metrics be continually missed or ignored, or alternatively should they be exceeded with little to no recognition.

We all live with metrics everyday, outside of business, and miraculously seem to (in the main) be able to meet the objectives. For example, traffic speed limits. Typical traffic roads rules include set speeds for various roads. Government authorities impose speed limits, for various reasons, that road users are required to obey. Should anyone break the speed limit, and are measured doing so, the repercussion may be a fine or loss of driving points (if relevant to the given country) etc. Should one choose to continually break the speed limit, and get caught, the severity of the action taken by the authorities may be increased i.e. increased monetary fines, potential loss of licence etc. In summary should a driver choose to ignore the set metric, there are consequences. In part (I appreciate not all) this helps ensure the majority of road users keep within the set parameters thereby helping to ensure an orderly road system.

Yet in the everyday business world there is often a chasm between the set metric and the outcome.

I have seen a numerous projects and "transformation programs" where a key platform of the recommendations is the introduction of new metrics aligned to the deliverables (prize). I have seen these same companies set up fantastic spreadsheets tracking the progress in line with the new metrics. However time and time again the prize emblazoned on the PowerPoint presentation does not materialize. Please do not get me wrong, there are multiple reasons why a project / program does not achieve its objectives (including setting the wrong objectives and metrics to start with) however in my opinion the lack of consequences for not adhering to the new measurements is often a considerable reason for a project's performance.

I am not suggesting firing anyone and everyone for missing a number or objective however I am suggesting that if a metric is in place and it is ignored or missed by a mile then there should be an action plan to get things back on track, including resetting the metric or objective if appropriate. Likewise, it is equally important to recognize those who do meet and / or exceed the set requirement. Again, I have seen many employees work ridiculous hours to achieve a specific objective only to end up incredibly demotivated because their effort in achieving the metric was overlooked.

Part of the action plan may be the need to review the metrics or objectives themselves. How many times have you looked at a Balanced Scorecard and scratched your head wondering who is really responsible for achieving what? (As an aside here is a great article on this particular issue - link).

My suggestion to anyone reading this is that the next time you are assigning metrics ask yourself, "If this objective / measurement is or is not met, then what?" If the answer is "absolutely nothing"...don't bother.

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