It’s often been said, “If you can’t measure it, you can’t improve or manage it."
I wholeheartedly disagree. Can you measure love, or any other emotion? How about commitment? Empowerment?
We now live in a world with more data than ever, and people are connecting the dots with increased analysis, speed and effectiveness. This has spawned a huge new industry called Big Data. But all the data in the world is not enough. Not by a long shot.
I’ve learned that most executives compile as much data as possible (to support left-brain or linear thinking) and then use anecdotes and feelings (to support right-brain or emotional thinking) to make final go / no-go decisions. And, of course, there’s science to support my gut.
In June 2014, the Fortune Knowledge Group and Gyro published “Only Human: The Emotional Logic of Business Decisions.”
Fascinating results, from 700+ U.S. based executives. Three of my favorite findings include:
- 65 percent of executives believe subjective factors that can't be quantified (including company culture and corporate values) increasingly make a difference when evaluating competing proposals. Only 16 percent disagree.
- 62 percent of executives say it is often necessary to rely on gut feelings and soft factors.
- 61 percent of executives agree that when making decisions, human insights must precede hard analytics.
One of the most famous and often-quoted comments from The Supreme Court is attributed to Chief Justice Potter Stewart: “I can’t define it, but I know it when I see it.” He was referring to obscenity. But he just as well could have been describing "results."
So, how do smart leaders measure results?
Outputs — Outcomes — Impact
Typically, we seek results measured and reported via these three scales:
Outputs are “objective” measurements, often used by marketers and communicators, and include easily tracked items such as page views, exposures via earned media placements and ads, number of visitors to a trade show booth, subscribers to email newsletters, etc. Easy to measure; very difficult to truly assess if progress is being made. This begs the question, “So, we met 100 people at the trade show; how many took action, and how did those interactions work in a relationship-building manner?" Outputs usually drive the score sheet on tactics.
Outcomes are often “subjective” measurements, frequently used by senior executives, to assess the “so what” of the outputs. This is how we keep score on strategies. This gets us closer, but not all the way.
The holy grail of measurement is gleaned by assessing Impact. Questions like, “Are we truly moving the needle? Is our core purpose effectively served? Is this really working?"
I turned to an expert for his advice. Munro Richardson explains, “Impact equals systemic transformative change."
(Both Munro and I support Turn the Page Kansas City (TTPKC), a community-wide initiative to improve third grade literacy for all children in our metropolitan community. The first examples he cites are specifically for TTPKC.
Munro continues to explain, "Organizations create impact when they produce outcomes better than what we would otherwise expect to see." In other words, they move the needle on outcomes from the normal trend line to something better:
- Greater percentage of third graders reading on grade level.
- Lower levels of high school dropouts.
- Reduced recidivism of former prison inmates.
- Higher percentage of first generation college students earning a college degree.
For a for-profit business, the metrics are different but the thinking is the same. Does a marketing campaign produce more outcomes (leads, retweets, referrals, impressions, followers, likes, etc.) than we would otherwise expect to see?
There's good industry data for a lot of these indicators. Can the way a company communicates, interacts with customers, treats its employees, etc., move it from its current trend line to something better?
Trust your gut
Have you ever tried to persuade a friend to your point of view by using logic when instead they are focused on feelings and emotions? Likely, it didn’t go well, even though you “knew” you were right.
Daniel Pink explains this in his book, “A Whole New Mind: Why Right-Brainers Will Rule the Future." He says, “The capacity for logical thought is one of the things that makes us human. But in a world of ubiquitous information and advanced analytical tools, logic alone won't do. What will distinguish those who thrive will be their ability to understand what makes their fellow woman or man tick, to forge relationships, and to care for others.”
Logic alone won’t do. I know it when I see it. About 60 percent of all business execs rely on “soft factors.” Want more proof? Sorry, you can’t have it.
Learn to trust your gut when making decisions and analyzing ROI. Trust your gut when reflecting on completed initiatives to gauge success, make course corrections and move forward.
If you’re smart and successful, you already have a proven track record. You recognize that your gut is right more often than it’s wrong. Accept the fact that you’ll make some bad decisions. You’ll never have “all” the data you need to ensure absolute accuracy.
I encourage you to embrace Michael J. Fox's philosophy, “I expect excellence; I leave perfection to G-d."
Successful leaders use anecdotes and intuition as “proof." If it feels right, it probably is. Go for it.