Measuring for Value or Vanity

You may be familiar with the saying “what gets measured, gets done.” There’s a lot of truth to it. The underlying principle is that measures keep us accountable. Which leads to an important question. What are we measuring?

This came up in a session I was part of the other day. It got me thinking about the kind of metrics we use. Do they lead to greater value creation? Or are they simply for vanity? To make us look good. Make us feel like we’re making progress. Yet, not providing much in the way of useful insight to make long term impact.

We get satisfaction from sending out a large quantity of emails. Or adding a bunch of new features to a product. Or, in my case, getting another article out the door. We can tick that box. Report our success and progress. But, how much real value have we created for our customers or colleagues (or audience)?

Ah, but it’s so satisfying to have that things-to-do list ticked off. To have the pats on the back. They are readily visible and are easier to capture too. Yet, we may have taken our focus off the beneficiary of our work. Or lulled ourselves into a false sense of progress.

Often, in complex, knowledge-based work, we’re dealing with uncertain situations. The solution may have to emerge. The path to value generally starts by walking through the fog of ambiguity. How can we set up metrics that will guide us to make progress in the right direction?

Here are some principles and prompts to frame our thinking around what we can measure:

End beneficiary front and centre. The greatest sense of purpose in our work comes from making a difference to a customer or colleague. Measures need to keep us accountable to delivering value to the end beneficiary of our work.

Prompt: How will this metric help us better understand our customer or see how we’re benefiting them?

Show meaningful progress. Teresa Amabile’s research identifies a sense of progress as vital to engagement. But the end goal is lasting value, not activity. Activity is a means to an end. A sense of progress alone is not enough. The activities we measure must be meaningful. They must contribute to our purpose and be part of the value creation process.

Prompt: How does this metric show that we’re progressing in value creation?

Metrics must be actionable. Eric Ries, author of Lean Startup, talks about vanity vs actionable metrics. Vanity metrics make us feel good because they confirm our biases. But they don’t lead to action. They don’t move us forward. Actionable metrics might expose uncomfortable truths that we need to be aware of. They lead to greater awareness and a higher quality of decision making.

Prompt: what specific actions does this metric lead to?

So, lets make sure we’re setting up the right measures to get the right things done. It may take a few iterations to land on value metrics in your context. Reviewing and fine tuning is a necessary, ongoing process.

Want to know a quick way to test whether you have a good metric? Ask “So what?” a few times (in a polite tone of voice, of course).

Reach out to discuss ways to set the conditions for meaningful progress in your team.

Doug Maarschalk is a trainer, facilitator and coach who uses the principles of intrinsic motivation as the foundation for his work. He has worked with New Zealand businesses in the horticulture, legal, accounting, financial services, real estate and healthcare sectors.
Read more about the Services Doug provides and the Clients he has worked with.