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Metric Mania

I recently conducted an employee survey for a midsized biotechnology company. It is a measurement-oriented company that follows extremely detailed operating procedures to ensure it produces high quality products. The survey results showed that employees don't have a clear understanding of the organization's goals, the steps it was taking to achieve its goals, or the metrics it was using to track the company's performance.

When I related this to senior management, they were dumbfounded. They told me that they conduct monthly all-employee meetings in which the president uses a detailed PowerPoint presentation to relate how well they are performing.

I then fed back these results to employees and asked them why they didn't understand the company's goals or performance feedback. They said there was just too much detail provided in the president’s presentations. One employee elaborated, "The president reports on all 32 of the company metrics and by the end of the presentation we're totally confused." She added, "Just tell us whether we're doing better or worse. Give us one number."

The Problem for Employers

Employers today measure just about everything—performance metrics, quality metrics, efficiency metrics, customer metrics—you name it. Dashboards and balanced scorecards that present all these numbers in one place have become commonplace.

There is nothing wrong with measuring many things if the measurements are used appropriately. The problem at many organizations, however, is that there are just too many metrics. Many dashboards, assembled presumably to simplify the process, end up looking like the cockpit of a 747, with hundreds of gauges and meters. As Harry Nilsson said in The Point, "A point in every direction is the same as no point at all." Metrics must focus rather than distract or confuse people.

What to Do

  1. Remember that less is more. Identify the one or two most important organizational performance metrics and focus everyone in the organization on them.
  2. Simplify employee communications. Employees want to know, how they are doing, not the results of 32 different metrics. Besides, psychologists demonstrated long ago that we can only remember seven, plus or minus two, pieces of information. Boil it all down for employees and tell them the bottom line. Have backup details available if they ask questions or want additional information.

Conclusion

Practice parsimony. When communicating to employees about performance, keep it simple. Answer the basic question they really want answered, "How are we doing?"