Metrics can be useful. When we can measure a thing, we can get a quick snapshot of how well it’s doing. If we tinker with the numbers, and they go up or down, we can feel good about ourselves.
But they can also be a curse. Sometimes, they measure the wrong thing.
For instance, metrics that tell us what time our employees arrive at work may seem useful. But if we’re honest, they do not actually measure how effective our employees truly are. And sometimes, middle managers place too much emphasis on measuring ‘arrival times’ as opposed to ‘effectiveness rates’. One is not necessarily an indication of the other, and fixating on the wrong one can damage the real goals.
Sometimes, the metric can be plain wrong
Consider the example of the metric by which Wall Street analysts measured computer chips. For years, the metric was really simple: good computer chips had a high clock speed. In other words, they worked fast. Poor computer chips worked slowly.
That’s fair enough.
As computer chips became smaller and smaller, they came up against what seemed like a logical end to the possibility of development. Eventually, a chip would be so small, and require so much power, that it would simply overheat and burn up. Within the industry, this became known as the ‘power wall’.
Intel’s Israeli team, whose members were already pioneers in this field, creating smaller and faster chips than just about anyone else on earth, saw this problem coming. Rony Friedman, one of Intel Israel’s top engineers at the time, came up with an unorthodox solution. He pointed out that the current way to make chips faster was to deliver more power to their transistors, a system that was a bit like trying to make cars go faster by revving them more highly, rather than by building cleverer engines. Sure, a car would go faster if you revved it to the limiter, but eventually, it would break.
Friedman and his team hypothesised that what the chip actually needed was the equivalent of a gearbox. If you could down-shift, you would be able to get more out of the chip without burning it out. So they invented such a solution. They found a way to split up the instructions being fed into the chip. The result was that their low-power chips didn’t need to flip on and off as fast as chips had done before, but they could nevertheless run software faster.
Brilliant, right? Well, yes, provided the prevailing leadership is not stuck on a false metric.
When Friedman and his team tried to promote the idea to Intel in the United States, their counterparts were more or less horrified. The US team knew that the world, including Wall Street, had been thoroughly trained to think in terms of clock speeds. This new chip ran a slower clock speed. Sure, it was more effective and would last longer, but it wasn’t ‘the way things had traditionally been measured’.
In Start-up Nation, Shmuel Eden, a member of the Israeli team, describes how they eventually sold the altered parameters to the US leadership: ‘We did it the Israeli way,’ he said. ‘We argued our case to death.’
Tempting. But not always right
Metrics and parameters are terribly tempting for managers who feel they need to know what is going on in their organisation. But they can be equally misleading, because they err on the side of time-and-motion studies. Sure, they may give you a number. And yes, you can tinker with that number and improve it marginally, but if your starting point is to assume that the current approach is the only, ultimate and correct one, you are already on the wrong path. You have precluded the possibility of innovation. You are arguing for hotter and hotter chips, when in fact the real solution might be a much cooler one that actually works better.
How do you ensure that you, and your management team, genuinely measure the right thing?
One way is to share the Intel story in order to convey the spirit of this dynamic. Use it as a metaphor, a framework for problem-solving. Ask: ‘Are we just trying to make it hotter and hotter? Or should we be thinking about a clutch, in order to shift gear?’
That’s a pretty good way of getting humans to see that an ever-climbing metric is not necessarily the only way, or necessarily the best way. It’s about looking for smartcuts, rather than simply adding numbers on a linear trajectory.
Douglas Kruger specialises in dismantling needless rules. A business speaker and author of 5 books with Penguin Random House, including ‘They’re Your Rules, Break Them!’, he presents locally and internationally on the topic of disruptive innovation and how to reduce your own rules in order to achieve it. Douglas is also a multiple award-winning speaker, and inductee into the ‘Speakers Hall of Fame’. See him in action at www.douglaskruger.co.za.