Metrics – Converge

Removal of the easiest to observe input metric – face time – reduces the availability bias in remote work organisations, and helps them focus on the more productive outcome-based metrics.

This switch to emphasis on outcomes can be helpful for individual productivity, but is truly transformative when the whole organisation goes remote-first.

Behavioural biases confuse performance appraisal in office-based organisation culture

The time spent in office looking productive is a key factor in performance appraisals across teams and organisations. Even when time in office is not a formal factor, it unconsciously creeps in and affects rating scores on other factors.

This focus on input factors and ‘visible productivity’ (time spent, sales calls made, lines of code written¹, bugs closed) is a result of the availability heuristic and substitution bias in action.

The outcomes of an individual/team’s work are delayed and often diffused – hard to credit exactly. However, the inputs are visible and trivially measurable. In pursuit of productivity metrics, the manager/organisation substitute the hard to measure outcomes with the easily available input factors (time spent in office, calls made, lines of code) etc.
Continue reading Availability bias and the remote work advantage

This headline reminds me of the old principle that I emphasise:

Money is the final metric

If our metrics don’t directly correlate to, or convert into money¹ in the near term, then they are not the correct metrics.

Too many metrics, in my experience, are designed for being:

easy to measure (or easily available),
easy to improve, and
comfortable to explain

What they are not designed for: being strongly correlated with current or future supply of money.

For growth, revenue (total, unit, net unit) is the best metric.

Views of our videos² can be good metrics if they convert directly into money:
– product sales show a direct correlation, or
– advertisers accept them as proxy for ad views, or
– investors require them as a valuation input for the next raise

Views of our videos are a bad metric when they aren’t directly impacting revenue. If sales aren’t growing in proportion with the views, then counting views is of no relevance to the health of the business.

The availability bias trip-wire

The availability heuristic operates on the notion that if something can be recalled, it must be important, or at least more important than alternative solutions which are not as readily recalled.

Most online advertising platforms understand this well, and use it to hook their customers (advertisers). If they show us good³, clean and easily accessible metrics of their choice, we will give those metrics more weight than they deserve.

The views count is right there – in the analytics dashboard. While finding the correct metric that actually correlates with sales, and then tracking it, can be hard.

This also ties in the second part of the hook. The view count number is also easily movable. Spend some money on advertisements, the view count will go up. Voila! View counts – a metric that is easy to measure, and easy to improve!

Those money-correlated metrics, they are even harder to improve than they are to discover and track. Oh look, the views went up again!

We all have heard of ‘Our viewer/user/visitor numbers were amazing, but the money ran out before…’

This is why the money ran out. Because we chose the easy metric, over the metric that really matters – money.

Continue reading Money is the final metric