What happens when metrics matter more than people — my 2017 takeaway.
2017 came with an immense amount of education around everything there is to know about metrics and business models (I know… thrilling). Seriously, ask me anything about CAC, MRR, Churn, NPS, any ratio really, and how they all relate. I could talk your ear off about why a subscription model trumps an hourly-billing model on every last criterion and why MRR is the holy grail of metrics. And, I agree, these numbers are all incredibly important, so if you want to get down ‘n nerdy about how to become more profitable and efficient, hit me up. I should warn you though, it is all very simple — metrics come from formulas, and when you follow formulas correctly the numbers will change accordingly.
I want to talk about something that isn’t so simple, but is far more vital to organizational success than any calculated metric will ever be. It isn’t revolutionary or new, but when you get it right, magic happens. It is something the most successful brands have had sorted out for ages (think Netflix, Google, and Apple), and yet, still, many companies haven’t given it a second thought.
I’m talking about people. Humans. Individuals. The thinkers, doers, and innovators who make bad, good, and great metrics happen.
Think about it. Which came first, the metric or the person? The person. Duh. Simple, right? Then why have people taken a backseat to profitability?
I believe that people have been deemed less important than numbers because they are more difficult to figure out than metrics. Numbers are easy to understand. Human behavior, on the other hand, is unpredictable and often irrational. So, many businesses and their leaders are taking the easy way out by defining success as a good ratio and ignoring the people who give their time, effort, and creativity to making those golden numbers possible.
What occurs when an organization ignores the people who keep it afloat? Turnover, low morale, negativity, resentment, mediocrity, and metrics that never reach their full potential. Major problems evolve when leaders fail to see the full picture.
I have witnessed this happen time and time again. A rapidly expanding company is experiencing growing pains. Leadership is answering to a board who is focused on quick returns and profits. They are under major pressure to become more and more efficient, so they have no time to conduct regular coaching sessions with their employees (let’s not use the term “performance review” ever again). Before you know it an unempathetic, unethical, and robotic culture forms. Heads are down, people are forgotten, and the bad shit I listed above ensues. This negative momentum becomes very difficult to bring to a halt, let alone reverse (think Uber).
People are more important than metrics.
This concept isn’t new. Economists, psychologists, and behaviorists have had this figured out for a long time, and yet so many companies and leaders are completely missing the point.
I’m going to lay this out quickly and simply. Leaders, please take note.
Employees value autonomy, feedback, coaching, clear goals, transparency and professional improvement. The beer taps, ping pong tables, and standing desks should be a bonus, not the incentives they are so commonly used as.
People aren’t as complicated as they seem. They want to do good work and produce valuable results that create positive impact. Let them.
Fostering a culture around autonomy, feedback, coaching, clear goals, transparency and professional growth will come back tenfold. It’s science. Employees will become more confident, creative, engaged, and positive. They will complete their work with integrity and passion. Productivity will increase and outcomes will be better than ever before.
Stop with the number-obsessed method of operating. It is not a viable long-term strategy. Revolve your company around the values you and your employees share, and place people at the core of your business. The ever-so-important metrics will follow.
Here are a few resources that further solidify this article. I highly recommend taking a peek at them: