better business blog

Tips and stories to add value to you and your organisation

Measure Me Stupid!

19 January 2020

Do you like numbers? Do you have a favourite number? Mine is lucky 7 …probably a common choice. Maybe I should upgrade it to lucky number …er… 37? 29?

Can a number be lucky? Perhaps we should consult a lottery winner…I’m sure they think they are!

However, whether they are lucky or not, numbers surround us, guide us and rule us.

Speed limits, free gigabytes of download capacity, tax percentages, calories eaten and steps walked.

I don’t remember having so many numbers in my life as a child. Life seemed easier then, when my favourite number was 3, because that was the number of books I could borrow each Saturday from the local library. Three books…heady stuff!

That was back before the internet and the rise of smartphones. Useful things, but creators of more numbers in our lives than we really need.

Business loves numbers too. One persistent and annoying number in business is the month end sales total.

On the face of it, it makes sense to track what is despatched each month, pegged against a target.

The problem is though that this can drive poor organisational behaviour. People work to meet the target, rather than working for the best interests of the business.

I worked with a client a few weeks ago who was shipping the wrong mix of products in order to meet their sales targets. The right mix would have kept more customers happy, been easier to pack and ship, but would have meant the sales target would not have been met.

Which in turn meant that bonus payments to staff would not have happened.

People work to the measurement.

If the measure encourages them to perform in a certain way they will rise to the challenge. A bonus option just cements in the problem, reduces flexibility and curtails thinking.

As the saying goes… if you measure me stupid then I will act stupid.

A better solution to the month end dive for the finish line is to report output as it happens and measure it against a 3 month target.

This allows for monthly variations and removes the cliff edge of a final week of rushing to get things out of the door, or in the post.

In the world of Lean process improvement a useful measure is On Time In Full.

If this is a high number then we have happy customers. They don’t care about our sales targets, they simply want their products as per their requirements.

How many useful measures do you have in your organisation?

How much time and effort is wasted through measures that are meant well, but drive disruption and poor use of resources?

Maybe it’s time for us all to take a fresh look at the numbers in our business and audit their usefulness. Perhaps some of them are not so lucky!

Next week: Growing Up Or Growing Down?