All That Glitters Is Not Gold: How Performance Metrics Can Make You Lose

But when the McNamara discipline is applied too literally, the first step is to measure whatever can be easily measured. The second step is to disregard that which can’t easily be measured or given a quantitative value. The third step is to presume that what can’t be measured easily really isn’t important. The fourth step is to say that what can’t be easily measured really doesn’t exist. This is suicide.

This quote comes from Daniel Yankelovich in 1971 writing “Interpreting the New Life Styles”, Sales Management.

McNamara is Robert McNamara, and this quote happened during his time working for Ford Motor Company. He was one of the ten Whiz Kids, former US Army Air Force veterans who became executives at Ford.

During the war, they used statistical process controls to increase the quality control of the processes and used metrics to inform their operational and logistical decisions.

These methods were used at Ford to great effect and McNamara was invited to join John F. Kennedy’s administration. He would be the US Secretary of Defense from 1961 to 1968.

He would use these same ideas in Vietnam.

McNamara wanted to quantify the success of war, as such, success was measured in the number of dead Vietnamese.

This framing of success allowed the use of Agent Orange. The US Army gave up strategic objectives to hit the metrics. On top of this, they failed to see the resolve of the Vietnamese and what the war was doing back in the US.

Single Metric Stupidity

In a previous post, I talked about the Four Evils Campaign and how Chairmen Mao thought that if they got rid of the sparrow they would increase food production.

They tried to optimise for a single metric in a highly adaptive ever-changing environment. The removal of the sparrow was very successful at removing a predator that keep the locusts in check. Without the sparrow, the locust population grew and decimated the crops pushing China into a famine.

The McNamara Fallacy, also known as the quantitative fallacy, relies on only making decisions with quantitative observations or metrics. You then ignore everything else. If you can’t observe it, you can’t prove it, therefore it has no value.

Weight Loss

People want to be healthy. It is a great objective. The issue is when they reduce health to be a number, either a weight or a BMI.

You can lose weight in many ways, slowly, deliberately, over time, in a controlled and thoughtful way. Quickly, through illness, losing a limb, terrible drug use, and starving yourself. They will all make you go down in weight.

If number go down equals good, then you don’t care how you lose weight, and you no longer are aiming to be healthy, you are aiming to hit a number at the expense of your health.

All That Glitters Is Not Gold

Metrics are wonderful ways to evaluate performance and success.

Unfortunately, staring into the shiny light can make you go blind. The metric no longer becomes a proxy for performance but a target to hit at all costs.

When setting targets for your team, make sure to be specific on the reason why you want to do something, as in I want to be healthier, so losing some weight might be part of that health goal.

The health goal could also be how fast you can run a 5k, how many push-ups, how well you sleep, how you feel in the morning when you wake up, and how much energy you have. It will be a variety of approaches.

If your team has one metric for success. It could be never missing a deadline, this could be costing you because the team will be getting exhausted, making mistakes, hiding bad information, anything they can do because the deadline is the only thing that matters.