Goals, Metrics, and Corporate Success
- Post By: Eileen Kern
- Date:
- Category: Uncategorized
- Tags: Business
For a long time I have had a complex relationship with the term “metrics.”
I like having something to work toward. I love knowing what success at something looks like so I can try to replicate that success. But sometimes when terms like “metrics” and “Key Performance Indicators” come into play, I start to worry that what is best for a venture may be put to the side in favor of what is easy to measure.
There is something, though, that I’ve been thinking about a lot. As of 15 seconds ago, I call it the “Ugly Flower Principle”:
Fig. 2: Working toward the Same Goal
By way of example, let’s say that my friend Mary and I are working together to sell tickets for a concert, and we each have the ability to devise promotions and set promotional prices for the tickets we sell.
However, in this scenario, Mary and I have been given slightly different goals: Mary is being held to a goal related to total number of tickets sold by the team, and I am being held to a goal related to total average ticket price for the team’s sales.
Mary and I might each care deeply about the concert’s success. Heck, we might even be friends who want the best for the other’s career. When it comes down to it, though, Mary is going to want to drop the price on tickets she sells when she thinks she will sell more tickets that way (helping her reach her goal). If Mary discounts her tickets, though, it will put me in a tight spot, because I am trying to make sure the team hits a certain average ticket price.
Now, this is an extreme situation, but imagine the difference between how the above situation will play out, and how the situation might change if Mary and I were both aligned to both goals.
So let’s jump back to the Ugly Flower Principle. Figure 1 looks like a (relatively) pretty flower. The center hub is “everyone”–in the example above, Mary and me. However, Mary is working toward Goal 1, and I am working toward Goal 2. It creates a “pretty” idea–the organization might set these goals optimistically, hoping that Mary will make sure volume is covered and I will make sure tickets are sold at a good price–but the idea can break down in execution. Even in a best case scenario, Mary takes her little blue arrow in one direction and I take my little blue arrow in a different one.
Figure 2 is an Ugly Flower. It only has one petal! But look at how much bigger that (not to scale) blue arrow is. That’s because “everyone” is working together toward a single goal–and getting a lot further. And, as I suggested earlier, this new “Goal 1” can even be comprised of several smaller goals. If Mary and I were both hoping to sell a large volume of tickets at a good price, that would become our new shared Goal 1.
Why don’t businesses have more Ugly Flower goals? Why don’t businesses tie salesmen partially to customer retention goals, or marketing partially to sales goals? (for more on this topic, check out my colleague’s excellent Business and Innovation blog post on the subject.) My guess, looking up from the individual contributor level, is that it’s mostly because it’s not “pretty.” Individual contributors like to be held to metrics that they believe they can control–and being held to another team’s performance is, frankly, frightening for some individual contributors.
Ultimately, what is best for the company (or venture, or whatnot) should be prized above all else–including one’s own metrics. So often, however, individuals do not feel empowered to do that–there is too much financially at stake to risk setting oneself back for the good of the whole. It’s a tricky situation to be in when every one of us needs money to live, and it is not always the ethical ones who rise to the top in a system where individual goals do not directly feed into broader organizational goals.