Tim Kung

Whether in business or life, we’re often measuring metrics to miss our goal.

Metrics abound, whether it’s revenue for a business or a target weight in our personal lives. Metrics are crucial to focus us and as feedback towards reaching goals. Clayton Christensen, famed business professor, has a book titled “How will you measure your life,” which asks the question of success from our personal lives perspective.

Christensen relays stories of connecting with former classmates at their ten year reunion, and who had far exceeded their metrics of life success (Eg. compensation goals). Yet classmate after classmate was unhappy with their lives.

The message was they pursued the wrong metrics for what they truly wanted in life.

Misuse of metrics is very dangerous, particularly if we track incorrect metrics over an extended period of time. Outcomes can range from wasted resources to catastrophic failure, or in the case of Christensen’s classmates, large amounts of unhappiness and regret in their lives.

Metrics misuse

Here are three ways I’ve seen metrics misused. If we’re aware of how we can use misuse metrics, we may be able to steer our resources towards true success. This misuse applies to both business and personal situations.

Vanity Metrics

“We had 100 attendees at our last in person event!”

“I’ve completed 300 fitness classes!”

It’s easy to be excited about statements like the above, particularly if they’ve been presented with flair. While perhaps impressive and encouraging, these are vanity metrics. Vanity metrics are metrics that seem impressive, but are meaningless or even misleading towards actual progress or success. They mean nothing without further context.

For example, 100 attendees to an event where 5,000 were invited, or when similar events had 1,000 attendees, adds context that indicates 100 attendees might not be as awesome as we thought.

Vanity metrics can be useful for for fun facts or to boost enthusiasm, but are dangerous as success metrics.

Uncontrollable Metrics

“We have a target $30 stock price in 3 years”

“I will attend the University of Waterloo one day”

I once heard a business executive rally employees with the goal of doubling the company’s stock price within the next two years. While it built excitement, this is a dangerous metric to hinge success on. A company’s stock price is a function of factors that nobody at a company can influence completely or at all. Economic, political, and competitive factors all affect a company’s stock price.

We can influence uncontrollable metrics, but the outcome is ultimately out of our control. Imagine measuring one’s own success on something that is uncontrollable or under somebody else’s control (ever hinge your success on the approval of a family member, partner, boss..?). It’s a recipe for anxiety and frustration.

At Amazon, there’s a concept of input and output metrics, which captures this idea well. Input metrics are those that one can directly control. Output metrics are metrics that aren’t under direct control, but are driven by the appropriate input metrics. For example, with Amazon, an input metric would the amount of selection available to customers, and an output metric would be sales revenue, where Amazon believes that greater selection leads to greater sales.

Misguided Metrics

“We have 100k users”

“I read 15 books this year”

A few years ago, I participated in a ‘annual reading challenge’ where I set a target number of books to read for the year. Given I wanted to read more, it sounded like a great idea. However, as I worked towards this goal I noticed I’d pay more attention to finishing the book rather than understanding the book I was reading. Worse, I would shy away from longer books and select books that were more “reasonable” in length. I was not accomplishing my true desire with reading, which was to learn ideas and to gain perspectives. A success metric with the number of books I read incentivized behavior that actually harmed me towards my true goal. This led me to abandon book reading targets, as I’ve come to value slower or re-reading of books instead.

Misguided metrics are those that don’t capture the essence of the success you desire. While these metrics may be valuable and exciting to achieve, they miss the ultimate goal, either completely on their own or they require additional metrics to fill out a complete picture. Misguided metrics can lead not only to failure on a goal, but lead to pursuit of counter-productive, unethical, or in extreme cases, illegal behavior.

What can we do to avoid misuse?

Here are some ways to avoid metrics misuse:

Think backwards from desired outcome

Think about what we truly want for success. Too often we choose metrics that are top of mind, or perhaps in the incorrect time horizon. Short term success metrics may feel great, but could run counter to long term success. For example, a company that is overly concerned with the next quarter’s revenue could deploy tactics to meet those numbers, such as increase marketing spend or pulling in sales contracts, but harm long term success.

With a picture of what the end state success looks like, choose the metrics that best indicate success to the end goal. This could be a mix of controllable and uncontrollable metrics. An important piece is to understand what they metrics are and how they relate. For example, if health is goal for me, I might select BMI (body mass indicator) as an uncontrollable (or output) metric, and have controllable (or input) metrics such as caloric intake per day and weekly duration of exercise that I track as primary metrics.

Challenge the metrics

With metrics selected, run through some thought questions to test the metric for validity or completeness. Some questions I like:

• If I exceed my wildest expectations with this metric, what does that look like? Do I end up with what I really want?
• If I succeed with this metric, what could still go wrong? Are there other metrics I need to look at to fill out the correct picture?
• Why did I choose this metric? Is this just a default metric I think should be used?

If one isn’t aware they’re looking at incorrect metrics, a “fool’s gold” effect is possible, where we think we’re succeeding, but end up surprised and disappointed when we find we aren’t actually successful.

Bonus: “The journey is better than the inn”

The above quote, attributed to Cervantes, reminds us that our journey is the important thing. I believe this to be particularly true with life. Success to our metrics is the inn, and may take years or a lifetime to reach. If we do not obtain joy and satisfaction from the journey, we’re both misusing our time on this planet and putting ourselves in a position we’re less likely to achieve our goals.

Thus in a strange twist, we strive for success with our goals and metrics, but our real accomplishment and satisfaction comes from the hard work and success along the way.

And in a stranger twist, if we work hard and enjoy the journey, we’re likely to find ourselves achieving our goals as a by-product of our journey.