Leadership

Metrics Misuse - Goodhart's Law

Now, metrics are not bad. But, they are often used in bad ways.

It might help to be aware of some of the side effects of mismanagement of metrics. From inadvertently creating behaviors that actively work against our best interest, to altering the meaning of the metric, mismanagement can do more harm than good.

Goodhart’s Law

Charles Goodhart is an economist and former advisor to the Bank of England. In 1975, Goodhart delivered two papers to a conference at the Reserve Bank of Australia. In those papers, Goodhart was discussing research and theory related to monetary policy and control in the United Kingdom. In the years leading up to 1975, existing monetary targets and the controls used to achieve the goals were no longer producing the results desired or expected. There had been what most considered to be evidence of a stable money demand in the United Kingdom. It was believed that the growth of money could be controlled through the setting of short-term interest rates. Higher interest rates correlated with lower money growth.

Goodhart warned, however, that policies and practices based on specific targets were flawed. Goodhart stated,

“Any statistical regularity will tend to collapse once pressure is placed upon it for control purposes.”

Any statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
— Charles Goodhart

A common paraphrasing is, “When a measure becomes a target, it ceases to be a good measure.” When I talk about this, I tend to add, “And the target therefore no longer means what you think it does.”

Goodhart’s law is a critical piece of information when we think about metrics. No matter how tempting it might be, the moment we set a target for a measure, we’ve changed the system, thereby changing what the measurement means, thereby changing what the target means.

The lesson here is pretty simple. Don’t set targets for metrics. And please don’t give teams incentives towards targets if you do set them. I know. I know. Management 101 says this works. But, science says it doesn’t. Seriously. Setting targets and providing incentives for knowledge work lowers performance. Don’t do it.

Instead, provide guidelines to the teams. My favorite guideline for metrics is, “Monitor trending. Dig in when the trend changes and you aren’t absolutely certain why.”

This article is an excerpt from the book, “Escape Velocity”, available on LeanPub, Amazon, and elsewhere.

Metric Misuse - The Hawthorne Effect

Now, metics are not bad. But, they are often used in bad ways.

It might help to be aware of some of the side effects of mismanagement of metrics. From inadvertently creating behaviors that actively work against our best interest, to altering the meaning of the metric, mismanagement can do more harm than good.

The Hawthorne Effect

Western Electric had commissioned an extensive study that ran from 1924 to 1932 at their Hawthorne Works in Cicero, IL. The intent of the study was to determine the impact of ambient lighting on worker productivity. Would employees be more productive under high levels of light or low levels of light? The workers in the factory were divided into two groups based on physical location within the plant. For one group, the lighting was increased dramatically while for the other group (the control) lighting levels remained the same. Researchers found that productivity improved among the group for whom lighting changed whereas the control group had no statistically significant change.

Employee working conditions were then changed in other ways. Working hours were adjusted, rest breaks were changed, floors were rearranged, workstations were kept cleaner, and several other adjustments were made, including returning the lighting back to normal levels and changing practices and policies back to original standards.

With every change, productivity made small improvements. By early 1932, and the end of the studies, the factory productivity was at an all-time high and employee attendance and retention were at record-setting levels. Some groups seemed to do better than others, but across the factory, all measures were improved.

When the studies ended, productivity, attendance, and retention soon returned to original levels.

The key takeaway from the Hawthorne studies is - that which gets measured will improve, at least temporarily. “The Hawthorne Effect” is described as the phenomenon in which subjects in behavioral studies change their performance in response to being observed.

This, at first, seems like a precious nugget of management gold.

  1. Measure productivity.

  2. Make it known.

  3. Ka-Pow! Increased productivity.

The perfect management formula.

But the reality was (and is), that while that which is being measured shows improvement, it does not mean the overall system has improved. Working longer hours can lead to employee fatigue and burn out, as well as lower quality. Lack of attention in areas not measured, such as quality or workplace safety, can lead to other negative outcomes.

If your team is slacking so significantly that merely measuring their velocity can result in a marked increase in velocity with no ill- effects, then you’ve a more serious issue at play than velocity.

What’s more, there is no guarantee that the thing being measured has actually improved. Velocity might have gone up because the team inflated story points. We should rephrase the key takeaway to that which gets measured will (appear to) improve.

This article is an excerpt from the book, “Escape Velocity”, available on LeanPub, Amazon, and elsewhere.

The Experiment Canvas

In the past few years, we at OnBelay have had the honor of working with companies who are looking to improve their engineering culture.

One key tool we use today is the Experiment Canvas. My partner, Diane Zajac, and I co-developed the canvas. It is based heavily on our experience with A3s. It is still a work in progress, but I want to share with you where we are to date. Please feel free to use it and give us feedback.

I might be the wrong person

I once had a personally troubling experience where I was let go from a team for failure to fit in. The team, as it turns out, did not "gel" properly. It seems it was determined that I was the cause or at least one of the causes of the discord. Rather than speak with me about my behavior, provide me actionable feedback, or offer me an opportunity to alter my behavior, the team lead chose to instead make a recommendation for my dismissal.

When I got the call to let me know that I was to be relieved of my duties pending the completion of the current project, I was blind-sided. Stunned, and trying to remain calm, I asked about my performance of duties. I was assured that I did the job well. That there were no complaints about my ability to do the work or my actual work performance. The issue was that certain members of the team didn't feel like I was a complete team player. Asking for specific examples, I received vague and strange feedback; things about how I behaved at social events, observations on my lack of attentiveness in the team room during times when we were all doing individual work, and favoritism toward a specific team mate such as talking to them more than others or bringing them a tea when I got one for myself. Most of the feedback included phrases like, "...just kinda felt like...." or "...sorta seemed...". Few concrete examples and nothing that warranted termination.

I thought it over, and rather than accept the situation, I appealed to the management committee. I asked for the opportunity to speak to the specific points that warranted my termination, or to at least be provided such points in writing so that I could clearly understand the basis of the recommendation for my termination. No such information was provided. Instead, the management committee overturned the ruling, allowing me to stay in the position.

As the project was coming to an end, a new Team Lead was announced for the next project. This new Team Lead had a professional relationship with the prior Team Lead. Whenever a project begins, there is an opportunity for the Team Lead to adjust team composition, if it is deemed necessary for the success of the project. It is kind of a "fire somebody for free" card.

As you might guess, I was again let go for failure to "gel" with the team. This, according to the new Team Lead, was based on their personal observations of the team and was not influenced by any other factors. This new Team Lead had worked previously with every member of the team except me; I was the only new(ish) member. This Team Lead had not been present at any team meetings, outings, or interactions with the team since I'd joined. In other words, the new Team Lead had no possible personal observations about my interactions with the team. None.

When I asked again for feedback, I was simply told that the team failed to "gel" and "needed a little shaking up". I was again assured that my performance of duties was not the issue. And again, when I asked for the observations that warranted my termination in writing, nothing was provided.

This time, I decided not to fight it.

Clearly, I was the wrong person for this team.

In hopes of avoiding such a situation in the future, I think it important to identify what exactly it is that you're getting if you decide to add me to your team, committee, or board. As this is my only experience of the sort, my examples of how I might be the wrong person are a direct reflection of the behavior and expectations of this specific team. If I have another such experience, I will certainly expand the list.

  • If firing someone comes before providing them feedback in your leadership model, I might be the wrong person for your team.
  • If being buddies is as important as (if not more important than) doing the job well, I might be the wrong person for your team.
  • If getting food for one team member, but not all is grounds for termination without warning, I might be the wrong person for your team.
  • If refusing to allow a team member the opportunity to share their own perspective before firing them (or ever) is part of your management style, I might be the wrong person for your team.
  • If providing mother's rooms "will encourage the wrong kinds of people to be here" is part of your culture, I might be the wrong person for your team.
  • If trivializing Code Of Conducts and victim blaming is acceptable, I might be the wrong person for your team.
  • If "the manager feels personally close to you" is a job requirement, I might be the wrong person for your team.
  • If your hiring process is done by a committee to help avoid bias, but the team lead can overrule the group to bring in a "dear dear friend who just needs to be here", I might be the wrong person for your team.
  • If the nature of one's personal relationships outside of work is used to evaluate work performance, I might be the wrong person for your team.
  • If the team is expected to attend social outings in sexually charged atmospheres, I might be the wrong person for your team.
  • If people who express discomfort with sexually charges atmospheres need to "lighten up", I might be the wrong person for your team.
  • If jokes about a man forcing a woman to commit a sexual act against her will is "harmless adult humor", I might be the wrong person for your team.
  • If the manager motor-boating a member of the wait staff is "just good fun", I might be the wrong person for your team.
  • If receiving late night photo texts of other team members in bed with each other helps your team "gel", I might be the wrong person for your team.

Leadership and Humility

Leadership and Humility

In November of 2015, HBR published an article entitled, "We Like Leaders Who Underrate Themselves". The authors describe an extensive study based on 69,000 managers, 750,000 respondents and hundreds of companies where through an analysis of 360-degree feedback data, they found that leaders who rate themselves poorly compared to how their subordinates rate them are not only seen more favorably by their employees, but actually have more engaged employees.

Bottom line to the article:

"The more people overrated themselves, the higher the probability that they have fatal flaws and the lower the probability they have any strengths. The more people underrate themselves, however, the higher the probability they have strengths and the lower the probability they have fatal flaws."

Doers Decide

Doers Decide

A hat tip to Tyler Jennings for the title of this post. He and I were in a meeting some time ago, along with a lot of other interesting people from Groupon Engineering. We were sharing our thoughts on team leadership and the role of managers. There was talk about how decisions need to be made close to the work and how managers need to not just seek advice, but actually provide others the opportunity to make decisions.

Naming Teams

Naming Teams

I was recently contacted by a colleague looking for a bit of advice.

C: "We are thinking about merging two teams together and we're not sure how to message the change."

D: "What do you think will be your biggest challenges?"

C: "Well, for one, we're not sure how the funnel flow team will respond to being folded into the purchase page team."

Organizational Motivators: Autonomy, Connection, and Excellence.

Organizational Motivators: Autonomy, Connection, and Excellence.

I think I saw Daniel Pink's TED Talk on "The Puzzle of Motivation" for the first time in 2011. I'd been reading some about leadership, management, and organizational psychology up to that point, but Pink's talk and his distillation of these complex concepts into a simple framework (Autonomy, Connection, and Excellence) inspired me to read more on the topics. Over the course of the next couple of years, I consumed a decent amount of material. You can view my Goodreads account to see what books I was reading. Unfortunately, there is no easy way to share all of the scientific articles and other sources I also consumed.

Shaping culture through inaction

Shaping culture through inaction

It is not only the things we reward that shape culture, but the things we allow. Perhaps the easiest way to shape a culture is to do nothing at all.

When a rockstar employee yells at, denigrates, or refuses to help teammates and you let it slide because the rockstar is valuable, you are shaping a culture. When a teammate tells a racist or sexist joke and you say nothing because nobody present is a member of the target group, you are shaping a culture. When an executive abuses power, when a coworker engages in gossip, when a team cuts corners to make deadlines and you decide it isn't your problem, you are shaping a culture.