Michael Harris and Bill Tayler wrote a terrific article in the new Harvard Business Review on “metrics surrogation”—the tendency for people to mentally replace their business strategy with metrics. Although these metrics are supposed to reflect the company’s progress towards its goals, the focus on metrics can destroy an organization.
Wells Fargo’s “”Eight is great” initiative, which had the company measuring daily cross-sell numbers, caused employees to focus on increasing that number—not necessarily deepening the bank’s relationship with its customers.
The Atlanta public schools cheating scandal, in which teachers received performance bonuses based on students’ scores on standardized tests, provided incentive for teachers and principals to erase wrong answers and replace them with correct ones—not necessarily improving students’ mastery of the underlying material.
And, of course, call centers in which employees are evaluated on how fast they’re able to get off the phone motivates them to cut calls short in a variety of ways—not necessarily by solving the customers’ problems.
In all these cases, the underlying performance or goal the organization is striving for has been replaced by the measurement of that performance. All too commonly, that leads to behavior that’s dysfunctional at best and illegal at worst.
The authors recommend three countermeasures for this problem:
Get the people responsible for implementing strategy to help formulate it.
Loosen the link between metrics and incentives.
Use multiple metrics.
All of which is valid, I guess, but I think it adds unnecessary complexity to dealing with the problem.
W. Edwards Deming had a much simpler way to avoid surrogation (even if he didn’t call it that). In his classic, understated way, he’d simply ask:
By what method?
In other words, what’s the method for improving performance? With that simple question, people would be forced to articulate the process they’ll use to reach the organizational goal. In the case of Wells Fargo, “illegally opening accounts for customers” clearly isn’t kosher. But “inviting customers to a local branch for a complimentary financial health checkup” might work. The Atlanta teachers wouldn’t announce that they were planning on fudging test scores. But “holding after school remedial instruction” might have done the trick. And call centers could provide workers with more technical training, or give them more latitude and authority to solve customer problems based on their own judgment.
Keep it simple: By what method?