Tip 4: What You Measure Drives Behavior
One key lesson that I’ve learned in my 25 year journey is that people will adjust their behavior based upon how you measure and reward their performance. If your metrics and reward system are in alignment with values and goals things often work well. However when they are out of alignment, it often results in undesirable behavior and gaming of the system. My 4th tip: What you measure drives behavior.
Several years ago, I worked with a leader who complained that his teams didn’t seem to be focused on meaningful results. Let’s call him Michael. Michael was very focused on numbers. Everyone in the organization was aware that numbers were his thing. When we looked a little deeper, it turned out that the problem wasn’t that the teams were not focused, it was what they were focusing on.
Michael measured the team’s performance based upon how many user stories they completed (a user story is a small self-contained piece of work in agile product development). Instead of focusing on ensuring that the individual user stories represented something that was actually valuable to their customers, the teams were focused on cranking out user stories.
Another metric that Michael used was story points. (story points are a relative measurement value, the number by itself is meaningless). Since Michael was using total story points as a metric, the teams started arbitrarily using higher numbers for their story point estimates. Essentially, they were gaming the system, to make Michael believe that they were doing more.
In what ways have you observed people gaming the system?
Leadership sets the tone for how people behave. Michael publicly praised his teams for having high numbers and staying “busy”. The teams were just following his lead. It’s not a surprise that his teams were more focused on delivering a lot of user stories, than delivering valuable work.
After some coaching, we were able to drill down to what was truly important to Michael. He became clear about what he valued and what was valuable to his organization. He also defined what success meant to him and to his organization. With this clarity, he communicated his vision and definition of success to the organization. He shifted to using metrics that were aligned to the outcomes he desired. With clear direction, the team began to focus on what was truly important.
Are you and your teams being measured and rewarded in a way that is fully aligned with the desired outcomes?
Too often this alignment is missing. I’ve observed that the root cause of dysfunction often boils down to questionable metrics or rewards. This will often divert energy away from what is truly important. As leaders, and as individuals, we can periodically ask ourselves: What is the big picture? What is the outcome I want here? How do I define success in this situation? We can use the answers to these questions as the foundation for what we measure and reward.
People game rewards and metrics in many areas of life and business. Some examples include:
teaching school children how to pass standardized tests instead of focusing on how well they comprehend the material
getting all of your friends to buy your book at the same time to become an Amazon best seller
measuring the number of clicks on a webpage without paying attention to how many of the clicks are converted to sales
rewarding salespeople for the number of new accounts opened (the metric behind the Wells Fargo scandal)
dehydrating oneself to weigh-in in a lower wrestling or weightlifting weight class
You get the idea.
What are some examples you’ve seen of questionable metrics or people? What was being measured and rewarded? Were there unintended consequences? Please share your stories in the chat.
My 4th tip: What you measure drives behavior.