The world is obsessed with quantifying every possible outcome, with the hope that creating a metric will provide objective, unbiased feedback on organizational performance.

The usefulness of metrics depends on how they are used. Metrics are not intrinsically good nor bad.

Context is everything.

If used wisely, they provide unambiguous clarity.

If used poorly, they replace judgment and expertise with false precision, misaligned incentives, and irrelevant quantification.

The intent behind metrics is legitimate. The implementation, however, fails to account for the drawbacks and incentive distortions inherent in trying to track complex activities.

First, we need to understand the limitations of metrics.

Second, always incorporate human judgment when assessing an outcome-based metric.

Metrics, taken at face value and without interpretation, do more harm than good.

Jerry Muller, author of The Tyranny of Metrics, describes the damage and insanity of metric obsession. Jerry shares many examples of how metrics have disrupted organizations.   

Let’s first look at all the ways metrics have gone astray…

Every team should be able to answer the question, “Where do we have relative superiority?”

Retired four-star admiral and former Navy Seal William McRaven, author of Spec Ops: Case Studies in Special Operations Warfare Theory and Practice, explains the concept:

Simply stated, relative superiority is a condition that exists when an attacking force, generally smaller, gains a decisive advantage over a larger or well-defended enemy. The value of the concept of relative superiority lies in its ability to illustrate which positive forces influence the success of a mission and to show how the frictions of war affect the achievement of the goal.

In other words, it’s possible that a smaller force, by defying conventional wisdom, can organize and defeat an imposing, yet scattered opponent.

McRaven continues:

Large forces are more susceptible to the frictions of war. The principles of special operations work because they seek to reduce warfare to its simplest level and thereby limit the negative effects of chance, uncertainty, and the enemy’s will.

Although gaining relative superiority doesn’t guarantee success, it is necessary for success. If we can determine, prior to an operation, the best way to achieve relative superiority, then we can tailor special operations planning and preparation to improve our chances of victory.

Your team and resources may not be as big as your competitors, but your ability to concentrate, move fast, and adapt, is well within your control.

Exit interviews are useful. To understand why people are leaving, get direct feedback from those departing.

There’s just one problem - don’t wait until people leave to have these conversations.

Understand and discuss frustrations before people leave, not after they’ve made their decision.

These discussions don’t have to be formal. Nor does it have to be a high-pressure, high-stakes conversation.  Just ask people about their issues and what they would like changed, especially as it compares to outside opportunities.

It’s perplexing for leaders to wait until someone is walking out the door to learn. Learn while people are there. Make it a fluid, ongoing process. Exit interviews shouldn’t be a one-time thing but a continuous dialogue over a person’s career.

When employees feel like they must wait until they leave to voice issues, that’s a problem. Many employees and employers don’t want to talk about the obvious truth: people leave jobs. It’s not uncommon, so get over it. Don’t pretend it doesn’t exist.

Read more below…

I’ve been flooded by electronic holiday cards wishing happy holidays and a prosperous 2023.

But the senders are forgetting one major thing. Effort matters. An electronic holiday card means nothing when it’s blasted out of a CRM with no human touch or effort. It’s the meaning and effort behind the message that matters. Not the message itself.

I’m not looking for facts. I’m not looking for information. I’m looking for someone who cares enough to craft a note to me personally, even if it’s just a few sentences. I’m looking for someone who took time out of their busy day. That time is costly, and therefore, it means a lot.

Here’s the bigger lesson: if you want to send something valuable, it needs to have some cost. That may be monetary or it may be time. But expending a cost shows you care.

It’s the same thing with rubber-stamped signatures – if you are a leader, sign the damn card/letter/note yourself. And yes, we can tell if your assistant signs it for you. If you are too busy for this simple act, what message does that send? No one’s asking for you to write a book, but just make it personal.

Confidence and hubris are abundant in the investment world, especially in bull markets. Everyone claims to know where the market is going, what the Fed will or should do, and what the next great idea is. Just ask, and you’ll have plenty of people talking about their can’t-miss ideas.

Confidence is infectious. We all want to know what the market is going to do. We all want to know when the next big crash is coming. We hate uncertainty. So anyone that can remove that uncertainty has our attention.

But it’s not confidence that we want. It’s accuracy. Accuracy in the sense of actually making investment decisions that succeed long term.

Confidence is about predicting success. Accuracy is actually delivering it. That’s a big difference.

Confidence doesn’t improve accuracy; it only appears too. Confidence has no bearing on whether a decision is good or bad. Decision quality depends on your diligence, research, understanding, and timing.

Checklists are simple yet powerful tools. A wide array of industries have succeeded with checklists. Pilots use them to improve flight safety. Hospitals use them to improve patient care. Nuclear power plants use them to ensure safe operations.

Atul Gawande, famed surgeon and New York Times best-selling author, wrote the book on checklists – The Checklist Manifesto. It’s an insightful, practical look at how organizations use checklists to succeed in pressure-filled environments.

Checklist implementation is very popular. Organizations enthusiastically publicize how checklists have counteracted human and organizational flaws.

But like most good things, checklists have been misconstrued and distorted to become a headache, not a help, to an organization.

Organizations require mindless checklist completion instead of using them as a tool to improve understanding. It’s not the finishing of a checklist that drives value. It’s the thinking that occurs along the way that otherwise would not have happened. Checklists have become another mandated task to get out of the way. After all, bureaucratic organizations love nothing more than adding additional documentation and compliance tasks.