The Wrong Metrics Will Hurt You More than You Know
With the new year rolling around, I’ve been thinking a lot about goals, and the metrics needed to hit those goals. Also, randomly, I’ve started watching The Wire. For those of you who haven’t seen it, The Wire is a great series on the complications with police, and drug dealing in Baltimore. The thing I love about the show is seeing the organizational structure and strategy of both the police and the drug dealers. Both have different hierarchies that help and hurt them.
Since starting to watch this time around I’ve been noticing the KPIs that the police department uses to judge and grade their personnel, and how it has a negative affect on overall performance and creates negative internal politics. It may be obvious, but the struggle that the Police department has in the show (and likely in reality) is bad key performance indicators. Throughout the show’s multiple seasons (I’m still on Season 1) you see leaders of the PD focusing on quick and dirty arrests in order to improve their numbers. Arrests, and drug seizures are the main KPI’s, however it doesn’t lower the crime rates overall.
Additionally, they bury the top individual contributors and promote the wrong people. The people who play the game and know how to achieve their goals, but don’t really care about the well being of the department move up because they cause less trouble. The good police cause trouble because they always want to dig deeper to find the real problem.
In Season 1, two key contributors have been punished:
The first, Lester Freamon used to work in the homicide unit as a successful detective until he goes against his bosses orders, but closes a key case. Since he goes against his boss he is relegated to the crime inventory room for 13 years where his career is buried and forgotten. He lucks his way into a new unit being created in season 1.
The premise of season one is has to do with the second person, Mcnulty. Mcnulty is a drunk, but great individual contributor who goes to a judge early in the season and tells the judge (before telling his superiors) about a large drug cartel in Baltimore. The judge reaches out to the police office to see why they aren’t doing anything about it, and a unit is formed. Here, Mcnulty has identified a good strategy to improving crime in Baltimore, but instead of being excited about the prospect of taking down a drug lord that would have a trickle down affect on improving crime in Baltimore, the bosses are pissed. While Mcnulty could have done a better job of communicating this previously, he is one of the only officers in the department that seems to care. Despite this, his bosses look to bury him.
The short version of the rest of the story is Lester and Mcnulty are put onto a task unit set to taking down the drug lord. But the strategy, which is driven by the top is all wrong. The strong contributors on this team are interested in building a big case to take down the leaders of the drug cartel. The metrics are all wrong, all the heads of the police force want a quick and dirty response. They want some quick arrests and some quick drug seizures and then to end the task force. Why? Because everyone is focused on the wrong metrics from the Mayors office to the heads of the Police department. There is an aversion to the harder work that would drive real results simply because its harder. In the police organization as it is set up, politics are king and results can be gamed. Everyone is looking for the next promotion, and no one is focused on improving lives for the citizens in the city they serve.
It’s obvious this is backwards, but its not easy to fix. We all have seen this affect in companies we’ve worked in (typically in large companies). How do we assign the right metrics? How do we set goals? Its easy to grow Trials, but how do you grow revenue - that’s a tougher question. In the Wire, arrests go up, drugs seized go up, but its like walking on a treadmill, at the end of each year nothing changes.
Avoiding these issues are hard. People figure out ways to game shitty metrics. The goal is to move your team forward, and ultimately to help the company.
In a demand generation organization it means focusing on the metrics that matter. Get aligned with your sales team to figure out exactly the type of leads that they need. Work with your data science team to identify what a “Quality Trial” is. Pay attention to revenue, in SaaS its tough because it lags (which is why Quality Trials are critical), but make sure you are attributing the strategies you implement to the revenue being driven in.
Give a lot of thought to your metrics. Arrests don’t matter, lowering crime does - just like Trials don’t matter, revenue growth does. Don’t punish people for coming up with big ideas, listen to them and figure out how to execute. These things sound obvious, but they can be hard, and because they are hard, they are ignored.
