How Metrics Damage Teamwork and Morale....
“There’s no I in team” is one of the most hackneyed, happy clappy management cliches. It has a less well known but equally tired companion “All of team is in measurement but it is completely screwed up.”
Let me try to explain. A few years ago the firm I worked for elected a new leader. Less than a year later he brought in an outsider to run the business unit I worked in. Both leaders were more charismatic and inspiring than their predecessors. Both men have gone on to achieve great things, in many ways transforming their businesses and achieving profitability and growth in very difficult economic circumstances. Many of their priorities were similar and one common area was an emphasis on greater collaboration, hunting in packs as it is sometimes called, to leverage the power of the whole organisation. Both failed to make real progress in this area.
There are many reasons for this but one is the use of performance metrics. In my business, the previous boss had always believed that performance should be rewarded on the basis of team performance. He had never tried to measure it. At the end of each year, we would simply have a conversation. How did you do? was never the first question. Why did this account over perform? How can this group do better? were more typical. At the end, we would look at my contribution to those team achievements or struggles and reach a conclusion.
The new man and his leadership group took a different approach. He announced that collective rather than individual performance would be the new philosophy, perhaps without realising that it was actually the old approach as well. His management group backed this up with a series of measures in every arena. Revenue, profitability, utilisation, investment, compliance, relationship strength and many more were measured and reported weekly. In the face of consistently strong performance, some landmark new client engagements and the acquisition of brilliant new talent, one of the most important measures of morale went into reverse. Staff satisfaction and engagement scores dropped every six months and after a few years, employee turnover started to rise inexorably.
Why did this happen and how can Startups learn from this experience? The answers are complex and as yet little understood. Essentially this is a human problem. If you measure something and translate that into a message for a machine, the outcome will be entirely predictable. People are different. The messages that individuals and groups take from any given metric are impossible to predict. I love the Amazon “two pizza” rule which says a team can be no larger than can be fed with two pizzas. But even this with say a dozen people has many different moving parts. It is not just 12 individuals and one team. Every group of two, three or more people has its own dynamic with within the team. All have a different view of the team leader (if there is one). The law of unintended consequences basically runs riot in this environment. One of the wrongest and therefore most dangerous sayings in the dictionary of tired cliches is “What gets measured gets done.”
Anyone who follows this blog may be confused, didn’t we say a few weeks ago that measurement was really important to Startups? True and it is but it can also cause problems. Teamwork is also vital in the intense, close knit environment of a Startup. There is a simple answer. No internal measures. None. Nil. Nada. Zip. All measures should be directly linked to the customer. Winning them, keeping them happy, delivering what they need. No matter how precise, resist the temptation to measure internal performance. Forget attendance, productivity, quality and everything else. Truthfully, if I was running a large business again, I would be sorely tempted to do the same thing. Especially if it was a service business.
Perhaps I am too negative. We have the opportunity to develop metrics that could not have been imagined a few years ago. Which measures have been used successfully to build teams and drive business change? Where have you seen measurement work effectively? I would love to read your comments.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.