“Every line is the perfect length if you don't measure it.” Marty Rubin
“Buffett found it 'extraordinary' that academics studied such things. They studied what was measurable, rather than what was meaningful. 'As a friend [Charlie Munger] said, to a man with a hammer, everything looks like a nail.” Roger Lowenstein, Buffett: The Making of an American Capitalist
“We seek where there is light”. Goethe
Lesson 8: You get what you measure, and most organizations measure what they can see. This can lead to management focusing on all the wrong things.
My first “real” job was at Piggly Wiggly Southern®, a grocery store chain that was primarily based in Georgia in the early 80’s. This is the eighth in a series of posts describing the Executive Leadership lessons I learned in that first job.
I had reported to a new store and was shocked by the management teams completely different approach to operations. In my old store, we had been completely focused on inventory controls, keeping variable costs down and increasing profit margin. At my new store, the team was focused on keeping the store well stocked, clean and providing a great customer experience. The motto was “Volume Cures All Ills”, meaning that if you increased sales all of the other diagnostic statistics took care of themselves!
In my last blog I discussed how focusing on “measures” caused the management team to become managers driven by the statistics, not leaders focusing on the performance of their team. I included the Goethe quote because I have seen many organizations focus on what is easily measurable rather than on what is important, and what is easily measurable tends to be transactional rather than strategic.
One easily explained example that had a dramatic impact on individual attitudes and the culture of the store was the focus on employee time sheets in my old store, and the focus on employee output in my new store. While the new store had few rules (overtime had to be approved), the managers were focused on getting the job done. Here are a couple of examples of how this seemingly innocuous difference had a dramatic impact.
After the store was stocked in my old store, the Stock Manager was required to document the reasons for any hours used beyond the plan. This caused him to drive the crew to get done, not necessarily do a good job. I suspect more time was spent on explaining the time used than was saved! In my new store, management focused on the output. We stocked on Friday night, and every Saturday morning the Manager and the Stock Manager walked every aisle to make sure that they were fully stocked and looked clean and organized. Each aisle had an assigned stock clerk, so the Stock Manager would then share the managers expectations and observations with them.
In both stores, the supply trucks would arrive during work hours and we would pull off shrink wrapped pallets of food off the truck and store them in the backroom. We would then pull off the product and group it based on what was on each aisle, allowing the stock clerk to have everything they needed on their pallet. In my old store, because the Stock Manager was so focused on getting done on time, we would often pull huge pallets out into the aisles and start stocking before the store was closed. This often resulted in blocked aisles for customers trying to shop. In my new store, we never pulled out pallets until the store was almost closed, so the customers were able to shop unimpeded.
My new store had elaborate and creative displays. The Store Manager wanted the shopping experience to be fun, so the entire front of the store was a constantly changing series of creative displays. For example, we once built a huge castle out of 12 pack’s of soda, complete with a blow up dragon! Each holiday had a huge creative display that focused on foods that were associated with that holiday. The result was a vibrant and ever changing “look” for the front of the store.
But those displays took time to build, maintain and then break down. We never could do anything like that at my old store because of the focus on “hours”.
How many of you work in organizations where you “seek where there is light”? It is easy to audit travel, so we do. It is difficult to measure “leadership”, so we don’t. It is easy to audit a timesheet, so we do. It is difficult to determine how much a person achieves while they are working, so we generally don’t. It is easy to determine how well someone follows an organizations policies and procedures, so we do. It is difficult to determine how efficient or effective that person is in executing their “real” job, so we don’t.
Developing and implementing meaningful metrics is very hard, but it is also extraordinarily important! Measure what is important, not what is easy. Otherwise you may find people doing dumb things in an attempt to deliver what you are measuring.
Coda
As I reminisce about my early career experiences, I continually juxtapose these stories about what occurred in a grocery store chain in Georgia in the 80's with what my wife and I experience in our current corporate jobs. Just today I was in a high level discussion about "measures", and I used the quote "You get what you measure, and you measure what you see"! Meanwhile, my wife's employer is slowly strangling the goodness out of what is a fantastic business model by focusing on unimportant metrics obviously designed by accountants or attorneys, not health care professionals. What was once a client focused entrepreneurial organization is predictably morphing into a stifling beaucracy driven by meaningless measures. How sad.