Do You Have Metric Fixation?
Jerry Z. Muller is my new hero. He is author of The Tyranny of Metrics, where he introduces the concept of metric fixation. Basically, metric fixation is when you put the wrong measures to the wrong use for the wrong reasons.
Metric fixation is when you think you’re doing performance measurement the right way, but it’s driving performance backwards and not forwards.
(Aside: we all use words like measure, metric, KPI, and indicator and assume they mean different things. I’ve not seen enough to convince me they each have unique meanings. Don’t let the terminology problem distract you.)
Muller describes three beliefs that suggest, should you hold to them, that you suffer from metric fixation. These three beliefs are fantasy-based.
Making performance measurement work well, to drive performance forward, requires that you not only let those beliefs go, but that you replace them with fact-based beliefs about how measurement truly works.
Belief #1: Metrics tell the whole truth.
Muller describes the first belief that defines metric fixation as:
“the belief that it is possible and desirable to replace judgment, acquired by personal experience and talent, with numerical indicators of comparative performance based upon standardized data (metrics)”.
This belief is fantasy-based, for two primary reasons. Firstly, the ability for people to design truly good measures is rare; the majority of people struggle to do it well. And so the majority of numerical indicators of comparative performance are not that good.
Secondly, it’s ludicrous to think everything that matters can, or should, be measured. The first belief of metric fixation doesn’t help us deepen our understanding what matters; it reduces what matters to trivial comparisons. Haven’t you noticed, on countless occasions, how the certain path to unhappiness is comparison and expectation?
A fact-based belief is that measures help us focus on the results that matter most, and the only useful comparison is how those results are changing through time. Powerful performance measures give us a lens to look more closely and deliberately at the results that require our experience and talent to improve.
Belief #2: Metrics always tell the truth.
Muller describes the second belief that defines metric fixation as:
“the belief that making such metrics public (transparent) assures that institutions are actually carrying out their purposes (accountability)”.
This belief is fantasy-based, and we all know it, deep down. We know that when we publish quantitative information about how well our organisations are doing what they exist to do, we come under scrutiny, no matter what the measures say.
The general public has very low competence in using quantitative information. The media has very biased perspectives in using quantitative information. Other stakeholders have very political intentions in using quantitative information.
The second belief of metric fixation doesn’t create transparency and accountability; it drives the truth underground. It makes us choose the measures that tell a good news story, or we make the measures tell a good news story.
A fact-based belief is that measures of performance work when they are used as feedback for the people who own the performance results the measures are evidence of. Powerful performance measures are tools to learn, experiment, and improve performance. Measures are not powerful when they’re used to manage upwards or manage outwards.
Belief #3: Metrics motivate people.
Muller describes the third belief that defines metric fixation as:
“the belief that the best way to motivate people within these organizations is by attaching rewards and penalties to their measured performance, rewards that are either monetary (pay-for-performance) or reputational (rankings)”.
This belief is fantasy-based, because neither pay-for-performance nor ranking are motivators for improved performance; they are motivators for gaming personal or organisational performance. Like how hospitals send at-risk patients home early, so if they die, they won’t contribute to the hospitals’ mortality rates.
The third belief of metric fixation doesn’t create more motivated people; it makes them feel unfairly judged. So they will make the numbers look good by changing the data or changing the system. And usually at the expense of the outcomes that really matter.
A fact-based belief is that measures are a fulcrum to give our improvement initiatives (or change initiatives or strategic initiatives) more leverage to create the performance results we want, and that our stakeholders want. Powerful performance measures are tools in our hands, to improve the performance of processes. Measures are not powerful when they are used as rods for people’s backs.
Move from measure fixation to focus, feedback and fulcrum.
Measures are their most powerful when they help us focus on what matters, give us objective feedback about what matters, and act as a fulcrum to more easily achieve what matters. The three beliefs of focus, feedback and fulcrum are the foundation of my performance measurement methodology, and why its eight steps are designed the way they are.
My performance measurement methodology is an alternative to the bad KPI habits – common measurement practice, in fact – that create metric fixation. And the more measure fixation we have, the worse the world becomes. If we want performance to be better, and the world to be a better place, we must do measurement differently to how it’s mostly done.
Powerful measures focus us on what matters, give us objective feedback about what matters, and act as a fulcrum to more easily achieve what matters.
Does your organisation show signs of metric fixation? What can you do to replace it with beliefs that measures give us focus, feedback and a fulcrum?