The Problem with Metrics

I’ve always been a numbers guy. Growing up, I was always pretty good at math. And I enjoyed it – when I went off I thought I wanted to be a math major (until I figured out that at least at my university, all of the math majors were a bit off in the head (and, also, way smarter than me)). I ended up majoring in economics because the math parts of it were attractive.

So it pains me when I have to say that in business, our attempts at measurement are often ill-founded. Many times we end up using numbers as a defence against ambiguity and uncertainty. Most of the time, instead of trying to measure things, we might be better off just getting more comfortable with these states – because bad numbers are worse than no numbers.

Math on the Wall

I was reminded of this during a conversation last week with a guy with whom I occasionally collaborate. He was bragging about how his company had 5000 followers on twitter, and that they had hired a social media consultant that was adding 300 followers a week.

Pretty impressive numbers.

Except that I know that they’re garbage. They often end up tweeting about posts of mine, and the net result of all this activity in terms of traffic is…. nothing. They have 5000 followers, but none of them are taking any action as near as I can tell.

This reflects the problem with having only one goal, in this case, followers. If you only have one goal, and it isn’t aligned with your overall strategy, you’ll fail to achieve your aims.

I’ve talked before about the problems with innovation metrics, and I’ve include a number of suggestions in this post, and in this one too.

The main points with metrics are:

  • Don’t mistake metrics for what we’re actually trying to measure: metrics are proxies – especially if we are trying to measure something abstract like innovation, or the quality of universities. So don’t get too hung up on your metrics – concentrate on your overall goal.
  • Align metrics with strategy: no one really wants twitter followers. You want something else – influence, or interaction, or something that one way or another actually does you some good. The interim steps are important, but don’t only measure these. You also need to figure out a way to measure the outcomes of your strategy.
  • Use multiple measures of success: this follows from the first two points. Most of the things that we really care about are hard to actually measure. If we are going to try, we need to use multiple measures so that we can triangulate on our desired objectives.

But sometimes, even if you follow all these tips, even if you’re a numbers guy (or girl) like me, you just have to really think hard about whether or not you’re on the right track. That’s often hard to measure, but surprisingly simple to figure out.

(picture from flickr/alist under a Creative Commons License)

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

14 thoughts on “The Problem with Metrics

  1. Tim, I totally agree. One of the hardest exercises with clients is getting them to stop before they rush to put down measures and really think about what they are trying to accomplish…how will this ‘thing’ (strategy, tactic, whatever) benefit the customer(s), employees, company etc…what is it you really want to see happen and then make sure we are measuring that – which sometimes is not the first thing they think about. And you need measures that balance each other (balanced scorecard like) and allow a holistic approach. I also love leading indicators – look for those first – which is not easy.

    Thank you for a great post!

  2. Great post, Tim.

    The old joke about the person asking a drunk why he’s searching for his keys under a lampost often comes to mind when I read or hear about obsessions with easily collectible statistics.

    I’ve posted a couple of rants about the commoditization of Twitter followers, highlighting the misleading and even negative effects this obsession can have. [I could have subtitled them “How to write a blog post that will never get tweeted” :)]

    I think the proliferation of social media, with its ease of access, is promoting a shallowness of analysis, and I’m glad to see you calling that out and encouraging a more principled approach.

  3. Just read some Leftover Thoughts About Authenticity over at PopMatters. Although the post is focused more on an individual than an organization, I think it corroborates what you are saying about the danger in placing too much emphasis on metrics and the importance of focusing on what really matters:

    Seeking authenticity now means, more than anything else, developing a strong personal brand. But what is the product we are branding? Bare life? What market are we after a share of? My problem with that isn’t that the personal brand is inauthentic—it just seems subject to kinds of evaluation and tracking and manipulation that corrodes human dignity, which rests in the myth that there is something ineffable and inexpressible about all of us that only comes out when we are in the process of doing something for people.

  4. Thanks Deb & Joe!

    Deb, I’m going through exactly that discussion with a couple of different consulting clients right now. I definitely understand why they want to have some metrics for innovation, and we’ve got some good ideas about how to best build them, but there are significant issues too. That’s what got me thinking about this a bit.

    Joe, I use the drunk & the lamppost story all the time when talking about this (especially when I’m talking about academic papers based on patent data), so I’m right with you there. The thing that was frustrating about my colleague with the twitter followers is that I actually want them to do well. Which means that I probably need to have a follow-up discussion about this with him…

    Thanks for the PopMatters link – that’s an interesting post!

  5. Tim,
    I’m not sure the problem here is what you’ve identified. I see this as a symptom of something more addressable. Before someone can do 1, 2 and 3 they must address the core issue — the disconnection of (as an example) social media from actual outcomes.

    IMO, people who run businesses (ie. not marketers) have failed to force marketing itself to move from “clever messages” to “translating need.”

    Because that’s what the Web should be doing for all of us. Can we agree?

    Specifically: Translating customers’ evolving need and capturing demand. And in PROVABLE ways. Right?

    THIS is what the Web is doing for the companies I’ve been studying as part of a book project (ie. Burger King

    So why aren’t we there yet — over 10 years after online marketing was birthed?

    I think we have to ask ourselves:

    Why would a business-minded person value lots of Web “traffic” more than loyal customers? How could anyone be reasonably satisfied with earning “social currency” rather than a clear return on financial investment? Why would a CMO believe Twitter tweets, positive buzz and Facebook friends carry more weight than sales, subscribers or leads? Or that somehow they’ll manifest sales without some kind of a plan?

    Because their thoughts and actions have been hijacked. Web marketing gurus are convincing marketing leaders to change their expectations, actions, language and measurements of businesses itself.

    In this bizarre, hype-filled we’re told to give away products for free; that word-of-mouth marketing is a radical new idea and “being part of the conversation” supersedes making sales online.

    Tim, the rules governing our businesses are not radically altered. The “digitization of everything” is part of an exciting evo-lution. The real revolution comes in telling the truth:

    The Web is a servant to business – not the other way around!

    Marketers are translators that discover evolving need and capture sales –
    no longer clever broadcasters.

    Businesses should be hiring direct response-savvy, accountable critical thinkers – not outsourced pontificators.

    I think marketers are ready to step up. But only if they have a “support structure” (are force fed it?)

    Thanks for considering and (yourself) asking better questions.

  6. Metrics should only be used to track progress towards a goal. Without the context of the goal, spouting off follower/friend counts is pure, time-wasting blather.

    I think we should spend the bulk of our time sharing our visions of the future; when we’ve achieved our goals. In this way, we create and maintain excitement for making progress towards a specific end, and THIS is where we can add a sprinkling of metrics to show the believers how we are actually making progress.

    Put the idea in my head.
    Make me want it for myself.
    Use metrics to show me it’s really gonna happen.

  7. Thanks for the thoughtful comment Jeff. I agree with most of what you’ve said. In my area (innovation management), social media doesn’t turn up quite as much as in marketing, but some of the issues with metrics are similar.

    To me, the key issue in all of this is the one that Joe raises in his first comment – we often end up measuring what is easy to measure rather than what matters. I think you’re making the same point in many ways.

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