“What gets measured…doesn’t necessarily matter”

One of the business bloggers that I follow religiously is Austin, TX. based Tim Walker over at Hoover’s Business Insight Zone.  I have written about Tim before, and I urge you to bookmark his site and subscribe to his RSS feed.  He recently posted a terrific entry on the famous piece of Peter Drucker  wisdom “ …what gets measured, gets done”.   Tim takes a somewhat different spin on Drucker’s point to emphasize how important it is to link “what gets measured” to your “Big Goals”.  It’s a point that is surprisingly lost on a lot of organizations.

I have written before how critical it is for an organization to have just a few important goals and to make certain everyone knows what they are.  We have a client that calls them WIGS…. Wildly Important Goals.  In our consulting practice, we often help force clients to reduce the number of WIGS because no one can manage more than a few of them at a time very effectively.     

Of course, once these goals are communicated, it’s important to measure progress against them.  But that’s where the disconnect occurs.  Organizations spend vast amounts of time and resources devising key metrics and building systems to automate the collection of the data.  The message seems to be, what gets measured, matters.  But as Tim suggests:

“It’s easy to find yourself measuring the wrong things — because what was once useful to measure no longer is, because we haven’t adapted old metrics or tools to new contexts, because we’re stuck measuring what we can measure instead of what we should measure, or simply because we’ve been mistaken about what’s beneficial.”

To complicate things, for many organizations the very act of  ”institutionalizing” these metrics makes people want to ignore them.  They become part of the background noise of information bombarding them on a daily basis. To combat this, one company we have worked with purposely keeps their measurement systems as simple as possible. They measure things that managers need to manage their operation, and can determine without help from sophisticated systems. If they have to be reported elsewhere, they have them fill out the forms by hand and fax them in to be compiled.  With a process like this, they have no problem changing the measurements to match up with their goals. 

Running a business has never been harder.  Everyone has fewer people and less financial resources, and there seems to be much less room for error.  It’s imperative to not just have goals, but to have wildly important goals, and it’s critical to stay focused on a few key priorities to achieve those goals.  In addition, it’s important to measure progress by determining what really matters – then get rid of the rest, it’s just noise.  Whatever you do, never assume that just because something is measured, it matters. 

Thanks for the insights and inspiration Tim!