3 ms·

I can think of two deeper whys. 1: Dilution of responsibility. Metrics are defined by committee, which in turn answers to another strategic leadership committ

I can think of two deeper whys. 1: Dilution of responsibility. Metrics are defined by committee, which in turn answers to another strategic leadership committee. No single person is responsible for failure. Mediocre managers recite the entrenched KPI mantra because it cannot fail. 2: Differentiability. If you can't measure how well you're performing, you can't tell if you're improving or regressing with any given change. Total revenue or other coarse metrics are so far divorced from any given decision that they can't provide feedback about it. Just like gradient descent needs the underlying neural network to be differentiable, a business strategy needs the performance to be differentiable. KPIs are an attempt at that. Ultimately, KPIs suck but give a fairly predictable average outcome. Not doing KPIs is a risk that most leadership is unwilling to take. KPIs sit in the same category of concepts as airport theatre security. They're a product of (find something you can measure and try to manipulate that number, no matter how meaningless | something must be done. This solution is something. Something is better then nothing. Therefore let's do this).

ergothus 8y ago
> If you can't measure how well you're performing, There are a lot of assumptions baked into that statement, not least among them: (1) that being unable to put a number on it means you can't tell if you're improving or not; (2) that this all boils down to a number anyway (or a reasonable set of numbers); (3) That such numbers are actually predictive. There are two primary reasons people complain about metrics in my experience: (1) They're difficult/tedious to get and/or (2) they lead companies to focus on the wrong actions. These would belie the claims you're making. (I can't tell if you're making them personally, or just echoing what you've heard, so I'll argue against the generic theory) Turn your scenario around: We have a system. Experts in the field agree the system is more likely to cause poor decisions than not. Should we continue the system? (And trying to gather metrics on whether the system works or not is not the solution, because the question at hand is if metrics accurately guide decision-making.)
- kuzehanka 8y ago
  You are preaching to the choir. I am just explaining why KPIs are prevalent and probably not going away any time soon. The business world is full of mediocre people who will cling to mediocre but predictable methodologies rather than take any kind of risk, especially if that risk is based in their own competence. The devil you know, etc.
- PeterisP 8y ago
  In the expected environment such as large corporations, the desire for an objective (even if bad) metric is driven by the fact because yes, being unable to put a number on it does mean you can't tell if you're improving or not - in every case you'll have some people making points why they believe it's improving and other people making points why it's becoming worse, with the arguments mainly driven by politics; in the absence of such numbers, any claims about a suborganization will be even less reliable as bad metrics - bad metrics can be manipulated, but no metrics means that claims can have no relation with reality at all. And regarding your latter paragraph, the answer to "Should we continue the system?" depends on what alternative systems can plausibly be implemented for making the same decisions. If the current system causes poor decisions, but the alternatives are even worse (or there are better alternatives which we are unable to implement), then we should keep the current system. Yes, the whole system would work better if people could just agree on what best needs to be done, and which activities are useful for achieving these goals, but often they can't. Metrics are a solution to a particular problem - an environment with limited trust and plenty of subjective politics, where any non-metric system for evaluating success and assigning benefits will be gamed as well. There possibly can be other solutions, but "simply" not having that problem isn't a solution.

ergothus 8y ago

> If you can't measure how well you're performing, There are a lot of assumptions baked into that statement, not least among them: (1) that being unable to put a number on it means you can't tell if you're improving or not; (2) that this all boils down to a number anyway (or a reasonable set of numbers); (3) That such numbers are actually predictive. There are two primary reasons people complain about metrics in my experience: (1) They're difficult/tedious to get and/or (2) they lead companies to focus on the wrong actions. These would belie the claims you're making. (I can't tell if you're making them personally, or just echoing what you've heard, so I'll argue against the generic theory) Turn your scenario around: We have a system. Experts in the field agree the system is more likely to cause poor decisions than not. Should we continue the system? (And trying to gather metrics on whether the system works or not is not the solution, because the question at hand is if metrics accurately guide decision-making.)

kuzehanka 8y ago
You are preaching to the choir. I am just explaining why KPIs are prevalent and probably not going away any time soon. The business world is full of mediocre people who will cling to mediocre but predictable methodologies rather than take any kind of risk, especially if that risk is based in their own competence. The devil you know, etc.
PeterisP 8y ago
In the expected environment such as large corporations, the desire for an objective (even if bad) metric is driven by the fact because yes, being unable to put a number on it does mean you can't tell if you're improving or not - in every case you'll have some people making points why they believe it's improving and other people making points why it's becoming worse, with the arguments mainly driven by politics; in the absence of such numbers, any claims about a suborganization will be even less reliable as bad metrics - bad metrics can be manipulated, but no metrics means that claims can have no relation with reality at all. And regarding your latter paragraph, the answer to "Should we continue the system?" depends on what alternative systems can plausibly be implemented for making the same decisions. If the current system causes poor decisions, but the alternatives are even worse (or there are better alternatives which we are unable to implement), then we should keep the current system. Yes, the whole system would work better if people could just agree on what best needs to be done, and which activities are useful for achieving these goals, but often they can't. Metrics are a solution to a particular problem - an environment with limited trust and plenty of subjective politics, where any non-metric system for evaluating success and assigning benefits will be gamed as well. There possibly can be other solutions, but "simply" not having that problem isn't a solution.