Figures Don’t Win Battles
During my career, I’ve seen a lot of leaders confuse figures with strategy. I’ve seen dozens of dashboards with an endless display of metrics that only appear to be indicators of imperfection in what really matters for the company.
Sometimes we spend a lot of our time looking at metrics or KPIs designed to measure the performance of a team, process, person, or some other thing that needs to be measured. But these metrics do not always arrive at the solution that fits best, usually because most leaders are borderline obsessive about historical metrics and in their minds, hitting their targets is the only true definition of success. Another reason is that these metrics are easy to see, identify and “analyze,” making it easier to take a team to task without much explanation, because “the numbers speak for themselves” and it doesn’t take much discipline to maintain them. This is what I would call “managing from the bleachers”—a sort of management approaches everything with minimal effort. Things like reading figures out of context, or worse yet, using figures as the sole arbiter for management of people and the team, which has to play the game under a critical gaze, without being given a ball. This is mediocre management; it’s easy to ask for results from the team without really getting involved.
Imagine a strategy that only looks at results and past performance. It’s like trying to drive somewhere only looking in the rear-view mirror.
However, it is important to note that when we talk about strategy, we’re talking about something that’s perfectly clear for the person who devises it, but totally abstract for everyone else initially. Metrics are useful for giving shape to strategies so that they are easier for us to grasp.
Successfully implementing a strategy requires ensuring that the metrics are lined up with the strategy, which involves taking into account at least two factors:
- The first factor is historical metrics, which provide data on results and for monitoring purposes, but that’s all they do in my opinion. Those figures are water under the bridge and unless you have a time machine, you can’t change the past—but you can look toward the future.
- The second factor is influence metrics, which you can act on to achieve a result. These metrics help us define and align the strategy.
For example: Boost sales. The historical metric would be year-on-year sales results, while the influence metric could be the number of leads over a given period, or the number of sales opportunities for each client—two figures that are under our control and depend on management, which is part of strategy implementation. Which is not to say that historical metrics are not important—they help us recognize trends—but influence metrics help us control the results.
Nowadays, part of management strategy should be ensuring that results don’t overshadow the rest, confusing people and making them lose track of what really matters. An viewed coldly, in isolation, is just that: a number. And a number can also destroy the value of a company.
As Peter the Great once said: “Numbers don’t win battles.”
No, but they help define the strategy we want to implement.
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