Performance measures for teams — how do YOU do it?
Measuring the performance of your innovation team (or other teams or even individuals) is quite a challenge. “What gets measured, gets managed,” is an adage often attributed to Peter Drucker, although he didn’t actually say it. But people have a knack for gaming fixed measurements, once they understand what it is and how it impacts their lives (e.g., promotions, raises, influence).
How do we measure people or teams, without the measurement being corrupted to give an undesired result? This question led to a paper by famous American psychologist Donald T. Campbell, who developed what we now know as “Campbell’s law”:
I come to the following pessimistic laws (at least for the U.S. scene): The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.
In his outstanding book #Antifragile (one of my A+ books), Nassim Nicholas Taleb talks about iatrogenesis, in which the treatment for a disease (or the “correction” of a team) can lead to even deeper maladies, due to unrecognized nonlinearities and other complex interaction. He recommends that everyone -- doctor and patient, employee and manager -- have “skin in the game” for decisions that are made, to provide feedback correction on simplistic and poor decisions.
Here are just a few thoughts I have about the topic of performance measurement at present:
If you have simplistic measures, they will be corrupted by the equivalent of Campbell’s law or Goodhart’s law, meaning that the measurement will become corrupted, leading to a worse or even new malady. Instead of “What gets measured gets managed,” I might find that “What gets measured gets morphed.”
Measure the team, not the individuals. After being measured over many teams, outstanding individuals will also be recognized. Who was the better NBA player, Wilt Chamberlain or Bill Russell? We could go in circles over the answer, but the more important point is that Russell won 11 championships in his 13 years of play, while Chamberlain won 2 championships in 14 years. Russell claimed that the way he played made his team better.
Find a way for each person to have skin in the game. I remember my Dad, who worked at Weirton Steel for many years as an engineer, telling me that at one competitor, which paid incentives to increase employee production, when someone was lazy or counter-productive, the rest of the team would correct the problem with fisticuffs. I’m not advocating corporal punishment here, but just noting that having skin in the game keeps everyone honest. Taleb would agree.
Monitor over time. Everyone can have a good or bad day.
We’d love to hear YOUR best suggestions for how to measure performance. Please add your best in the comments!
(1) Campbell, Donald T. “Assessing the impact of planned social change.” Evaluation and Program Planning, 2, 67-90 (1979).
