Dwight Mihalicz is the Founder & President of Effective ManagersTM, a management consulting firm based in Canada that provides services globally through a network of consulting firms. In 2013 Effective Managers partnered with the Telfer School of Management at the University of Ottawa to conduct ground-breaking research on understanding the dynamics of manager effectiveness in the workplace. This led to the development of a survey to assess manager effectiveness, and The Effective Point of Accountability® framework. These have been used successfully by organizations to improve accountability for the delegation of work and collaboration across functions. This breaks down silos and aligns the effort of the work force to focus on strategic goals.
This post was originally published on the Effective Managers blog.
Many businesses today have a similar problem. They have a significant tendency to focus on metrics instead of their company strategy. Yes, the metrics do show the progress the company is making towards its goals, but that focus on metrics can still create problems. What’s more, it can destroy an organization.
The Problem of Pushing Aside the Strategy
Michael Harris and Bill Tayler wrote a great piece in the Harvard Business Review about this very thing. They thoroughly discussed the tendency professionals have where they mentally replace the strategy of the company with metrics. They called it surrogation. It’s a passive thing, and it’s very typical for it to occur. That’s because a strategy is somewhat abstract, whereas metrics are concrete numbers that paint a clear picture. Plus, you can look at strategy as a blueprint and metrics as tangible results.
When you consider all of that, it’s no wonder that many companies tend to replace strategy with metrics. However, as many companies who have done that have shown, replacing strategy with metrics is a terrible thing. Metrics alone can never be enough.
For example, if you evaluate employees in a call center based on how fast they are moving from one call to the next, you’re essentially inviting them to cut calls short and provide a worse service to the customer. You’ll fulfill the goal of increasing specific metrics, but the cost will be deep customer dissatisfaction. It’s simply not worth it.
So, how do you fix this?
How to Counter the Problem
As the owner of your company, you need to start thinking more broadly. Stop focusing on the metrics that are concerned with the output of your organization. By these, I mean sales, ROI, profits, margins, and so on. These are all very important metrics, but they don’t paint a complete picture and by themselves they won’t help you improve your organization.
You need to start focusing more on the input measures that mainly have to do with ‘how we do things’ in the company. These are equally, if not even more important, than your standard metrics.
Additionally, you need to get the people who are responsible for strategy implementation to help formulate it, and you need to loosen the link that exists between metrics and incentives.
In the end, ask yourself one simple question: what is the method that will help me improve performance? If you manage to find the answer, you’ll effectively avoid the problem of surrogation.
To help ease the strain COVID-19 is placing on Canadian Businesses, TEC Canada has compiled insights from global experts to support business leaders as they navigate the challenges and opportunities presented. If you would like to receive similar information more regularly, please click here.