While working in the managed IT space, I encountered an enormous collection of businesses, departments, and managers who measured success by a singular metric. While that metric may change between companies—total revenue, number of IT tickets opened, number of contracted clients, and what have you—so many people point to a single measurement as the end-all, be-all hallmark of how they, their team, or their organization is doing.
While metrics and data points are fantastic references, they are terrible goals for the simple fact that they aren’t generally representative of what one is actually hoping to achieve. They can point to progress toward a goal, but if the metric is the goal, everything else—including the end result at the core of the push—will be sacrificed in order to meet that goal.
Unfortunately managing to a metric is also very easy which leads to the pervasiveness of this practice, since there’s only one factor to judge for success: did number go up/down? If yes, keep doing what you’re doing. If no, do something else. There’s little depth, finesse, or management tact required when everything boils down to a single measurement.
Take the example of a call center who decides that getting their average call time below five-minutes is the quarter’s goal. This may seem like a reasonable aim—after all, turning calls more quickly means shorter hold times and thus correspondingly more customers helped—but if “average call time” is the stated goal, and there are rewards (or penalties) associated with making (or missing) that goal, it becomes very easy to lose sight of what end result they’re trying to achieve.
In the best of cases, phone agents become less personable, less interested in human connection, instead being focused on finishing the call and moving on to the next. They may get irate at callers who aren’t able to succinctly describe the reason for their call, and some callers may feel that the agents are too brusque, too clipped, and that they don’t care about the customer. Ultimately, average call time would indeed go down, but caller satisfaction would as well.
As a darker example, and one I have personally witnessed at a call center, agents will start disconnecting calls when they start getting near the five-minute mark. Whether the caller had their issue resolved or not, whether it was a sales opportunity or troubleshooting request, the phone line went dead when time was up. No manager had endorsed, encouraged, or would ever accept responsibility for this behavior, but the employees who had the most dramatic drop in call times—for which they and their manager were financially rewarded—were also the ones who had the most “call-back” incidents and lowest caller satisfaction scores. These employees were turning over two or three times as many calls as their peers, but because the stated and enforced goal was “make number go down,” they did exactly what they needed to in order to meet the goal and get the reward.
In this example, what would a more effective goal have been?
Rather than focusing on the metric as the goal, I would have something akin to “caller satisfaction”, and establishing metrics such as hold times, client surveys, and instances of fixed-on-first-call. By viewing the metrics and data points as indicators, it’s much easier to drive the company toward an outcome that will actually be beneficial, rather than just chasing the latest set of numbers management has decided are important.
Some years ago I worked for a large company, large enough that regional department heads had to fly internationally and give regular reports to the parent conglomerate. The types of metrics and numbers my boss was concerned with seemed to change with the seasons, and what was of extreme importance one week was quickly dropped by the wayside in favor of something new. it was a constant whiplash for the employees and we never seemed to have a consistent goal we were working toward, or a comprehensive strategy to get there.
Over time I figured out that my boss’ frantic change of focus had to do with the mandates from our parent company: on a month to month basis they were worried about total revenue, meaning the dollar value of the goods and services we sold (which would ultimately affect stock price). On a quarter by quarter basis they were looking at profit margin, meaning what percentage of revenue was left over after we paid our expenses. On a year by year basis they were concerned with net profit, meaning the total dollar value of that profit.
This means that on individual months that were already strong with revenue (ie he knew he could easily hit the quota) he would encourage the sales team to slow-roll sales so they would be signed in the next month, since there was no extra incentive for getting higher than quota, just penalties for failing to reach it. It also means that by the end of each quarter he was pushing hard for the team to sell inexpensive services that had a high profit margin so his average margin would improve. At the end of the year he was hot and heavy for clients to buy expensive one-off items that had a high profit margin, to raise his total profit dollars.
Ultimately this caused a great deal of stress and confusion for the team—both sales and support, and made clients feel that our company only existed to sell them things rather than take care of their actual needs. Sales reps would slip extra fees, charges, and unwanted services into contracts just to hit certain metrics, and even a new company CFO left in disgust after only a few months, describing it as “financial gamesmanship.”
In the end however, were these metrics—total revenue, profit margin, net profit—the right goals for the company to focus on? I don’t believe so, but the boss was always happy to earn his commission/bonus check every time he came back from the parent organization.
There are absolutely different schools of thought on how to run a business, and there has been a growing trend to sacrifice long-term stability and relationships in favor of immediate, short-term boosts to revenue or profit. Look at the number of investment firms and mergers which result in companies being cut to the bone before being sold off for parts, with the managers and C-level executives responsible for the gutting—and potential short-term stock increase—getting hefty bonuses and payouts. I’ve also seen this time and time again with start-ups, with massive staff layoffs and the sale of assets to improve market valuation—on paper—to lure in potential buyers, again for the sole benefit of those at the top.
Even outside of intentional attempts to bolster/inflate short-term profitability however, it’s easy—and often attractive—for managers to focus on metrics as a goal, and then failing to identify the cause of poor outcomes, even if the goal itself was met or achieved.
I want to encourage and empower employees at all levels of an organization to examine and think about the value and applicability of any stated—and implied—goals, and to realign or speak out if they think the goals won’t actually lead to a beneficial/effective growth in the aims of the company, department, or team.
Just keep in mind: metrics are not goals!
Header image by Sergei Tokmakov from Pixabay, a fantastic resource for royalty-free stock images
