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Measurement and reporting

"If you don't measure it, it won't get done"

People understand that you need to measure and report on things in order to understand performance or progress. The problem is we often become laser focused in measuring our final outcome. When this happens we miss everything that is happening either around us or in between.

I was at an event last year and one of the key speakers was the secretary to the our current state premier (i.e. state Governor in the US). She had used the earlier quote in reference to the premier's leadership. It got me thinking. Later that year I went to visit my marketing counterparts in the US. When I met them I was amazed at their focus on specific numbers that we in Australia don't place as much emphasis on. It was interesting in that this focus created two completely different organisational cultures.

Understand what you want to measure.

When setting core metrics for your team, organisation or product you need to be aware of the behaviour it will drive. Think of a SaaS business with a subscription model that wants to see growth. New customer acquisition is decided as the way to achieve this growth so it becomes the primary focus and measure. Naturally now people will put their energy into acquisition related activities. Acquisition is the metric that is championed, celebrated and the key indicator people's job performance - a culture of acquisition will emerge.

Growth ≠ Acquisition. Growth = Acquisition > Cancels.

In this example, having an organisation focus on acquisition is great, but one dimensional. Growth is the desired outcome, however as acquisition is the core metric, existing customers will become neglected. Work required for retention activities will become harder to prioritise as acquisition is the priority. People working on retention activities will feel less important as their work isn't seen as being important to acquisition. The business may become an acquisition monster, however their cancellation/churn rates may be just as high which results in only a small amount of net growth. This could be avoided if growth was the metric that is championed from the top from the beginning. Acquisition is core to growth, hence it being the focus, however there needs to be a balance with retention as these two activities will drive growth more effectively than just one of them.

Speed doesn't incentive fixing the root cause.

Another example. An IT service department gets measured on how many tickets they close and how quickly they respond. These are reasonable metrics on a surface level. However think about the behaviour it drives. In this model there isn't any incentive to actual solve the requesters problem long term.

If a user is submitting IT tickets to the service desk but it is a user error, there is no incentive for the IT department to train out a solution as it would take them longer to close out the ticket and they wouldn't get as many. A staff member will go and fix the requesting users problem, close the ticket quickly and wait for the user to submit another one in the next week knowing it is an easy fix and looks good on their KPIs. The IT staff member is completing everything they are getting measured on and looks like a star to their boss.

From an organisational level, if the same problem keeps occurring due to a training issue, it is a waste of resource. The IT person is doing their job, it is what is being measured that is what is doing the damage. In this case, if speed and volume are key indicators perhaps they should factor in staff satisfaction with the solution or even if a ticket is opened for the same problem it is a negative indicator. Here actually providing a good service needs to be measured and incentivised, not quick wins by volume.

Right metrics, wrong way of reporting.

Poor choice of metrics and reporting can damage an organisation. However, you can have the right metrics but the way you measure them cause damage. If people from the sales team have targets that compete with the marketing team it will naturally create a strong "us and them" mentality between the two departments/teams.

Sales team members may tell customers not to use the website because they know that the marketing or web team will get the credit and not them. As the marketing/web team is also under pressure for numbers there is no motivation for them to help out the sales team. In an organisation that is stretched or under pressure to achieve its targets this kind of behaviour will become all the more prevalent. In this case the method of measurement - standard last click/point of contact attribution - is causing undue tension in the organisation. Rethinking the attribution model for the organisation in this case would bring both departments in alignment with one another rather than in competition. Competition is not a bad thing, however in this instance it is detrimental to the business.

Siloed measures = Siloed departments

When I was in the US office, the difference I noticed was the level the targets went down to. Every digital marketing channel had a very specific target and often a team that would compete with other digital marketing teams to achieve those targets. In AU we take more of a wholistic approach, some times different channels will perform better than others or the purpose of one is to support another. The US office is about 10 times larger than AU, so we're able to operate more holistically because we are a much smaller team. Both ways get results, and both have different strengths and weaknesses and its something as a leader you need to be aware of, however I personally much prefer to work in the more collaborative culture.

You need to be aware of how what your measuring is affecting behaviour. There is truth in the opening quote "If you don't measure it, it won't get done". However, I think you best be aware of what and how you are measuring things and how they can cause other things to not get done, or things to be done in ways that aren't desirable.

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