Metrics: Don't Overfocus on One

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     A friend posted an article on Facebook back in May. It was from The Chicago Reporter and was titled Chicago’s Urban Prep Academy – known for 100% college acceptance rates – put reputation ahead of results.
     Without reading the article, I commented that “When an organization focuses and stakes everything on one metric, achieving that metric replaces the original and noble mission.” She replied, “I personally believe it's a much more complicated issue than one metric.”
     Of course, she was right, but, and there had to be a but, we should not underestimate the undermining havoc that can be caused by over-focusing on one metric. Doing such will have unintended and sometimes negative consequences. I say this from my years of quality management experience in which selection of the right metric(s) is the very important first step and often the hardest step in problem solving and process improvement. The late great Genichi Taguchi used to emphasize this all the time.
     What seems to have happened to this school is akin to what a major health clinic is often suspected of. The health entity claims to have a high rate of curing a certain disease that has a high mortality rate. One of the ways they make this claim is by only treating those patients that have a high probability of survival if treated promptly. They give the impression that they can magic because of their high cure rates.
     It makes for great advertising in both cases, but the missions of both organizations have been hijacked by the focus on only one measure. Imagine going to the health clinic with the hope hyped in the advertising only to be turned away because your case does not meet their qualification criteria. Imagine being asked to leave a school because there is a good chance you will not be going to college.
     Metrics are huge in the business world. Given the transactional nature of commerce, it is easy to have more concise and well-defined measures that provide meaningful feedback on how some aspect of one’s operations are performing. Historically, most metrics were financial. Money metrics are easier to define and track. Money is additive. Your money and my money become our money. Sales minus costs becomes profits. That is the whole purpose of the accounting function: to generate, track, and analyze financial measures. Non-financial measures were generally more difficult and costly to generate. With the advent of business-wide computer systems, there has been an exponential growth in non-financial transactional data generated and saved. This data made the non-financial measures more economical to gather and track.
     The focus should be on a an agreed upon set of metrics that helps us from focusing on just one metric. This concept was formalized by David P. Norton and Robert S. Kaplan in a seminal 1992 article in the Harvard Business Review: The Balanced Scorecard—Measures that Drive Performance. Even before reading this I believed in tracking several metrics whenever possible. I believe it even more these days when calculating them is so much easier. I like to have a broad perspective and also want more in depth, diagnostic, metrics at hand when a C-level executive inevitably asks when a Key Performance Indicator (a metric of focus) takes a turn for the worse. As the name of their article suggests, balance is the key. Obsessing on one metric could skew management behavior and compromise the true mission of the organization.