Clarity of outcome or what you want to achieve is very helpful for two reasons. Goals which are stretching but achievable are motivating. Goals are also useful as a measure of progress – actual results tell us how well we are doing. But goals only provide a context for what is really useful, which is contribution. What makes for lasting success is not an up-to-date scoreboard. It is that everyone is making an above-and-beyond contribution and that the leadership of the enterprise is enabling them to do so.
OUR SUMMARY OF THIS VIDEO: The traditional metrics will reflect purpose over time. So having purpose and being purpose-led is not the absence of metrics, but it’s prioritizing the purpose before the metrics. And purpose-led organizations, over time, will demonstrate better metrics.
Companies that are purpose-driven tend to be more profitable, have better tenure of their employees, more loyalty over time, and more loyalty from their customers. And the traditional metrics tend to reflect that.
It’s in the short term that the metrics are not very useful. That is because sometimes we make purposeful sacrifices to do the right thing if we are purpose-driven or infinite-minded.
I had a meeting in the Pentagon once.
When you have a meeting you first wait in the foyer, then someone comes to get you and you walk to the meeting. And you have ‘hallway talk’ – because it’s too uncomfortable to talk about nothing but it’s too premature to start the meeting. So we say like, ‘How’s the weather?’, ‘Did you have trouble finding it?’ And when we arrive at the conference room, hallway talk ends immediately and we start the meeting.
So I was at the Pentagon and this big general came to get me from the foyer. And we’re walking down the hall to his office for the meeting and we’re making hallway talk. He says: ‘Hey Simon, I had everyone in my office read your book.’ And I said: ‘My publisher thanks you.’ And he said: ‘Tell them not to bother, I had them read my copy.’
Total book sales: one; total impact: huge.
Compare this to going to an event where they give out 500 free copies of my book Total book sales: 500, but people use them as coasters and doorstops; total impact: zero.
So in the short term it looks better at the event of 500 than selling one. But if I wait over the course of time the one will yield better book sales. Because those people will tell their friends to read it and their friends will buy a book, who will tell a friend.
So the point is that if I wait over time, book sales help me recognize whether the movement is growing. Yes, but not in any particular month.
People say: ”How many books do you want to sell per year?’ ‘How many speeches do you want to do per year?’ I don’t care, it makes no difference to me whether it’s this year, next year. What I want is momentum. The way I measure success with the metrics is: ‘Is the momentum going upward?’ The exact dates and the exact numbers are unimportant.
It’s like you want to lose a certain amount of weight by a certain date. But what happens if you don’t lose the weight by that date? Well you’re still way healthier than you were even though you missed the goal. So the goals are good because they help drive us and motivate us. But if you hit it or make it, it doesn’t matter in the infinite game. It’s a guidance, not an absolute.
‘Finite’ views metrics as absolute. ‘Infinite’ views metrics as a measure of speed and distance, as guides. We’re going faster, we’re going slower.
So yes, metrics are hugely important You can’t run a marathon without metrics. You need to know how fast and how far; you need metrics. But the question is how we view them.
For instance, there’s nothing wrong with the sales targeting. As I said, having goals gives us something specific.
If I said to you: ‘You will get a bonus at the end of the year if you accomplish more,’ you would reply: ‘How much more?’ If I reply ‘More,’ it would be unnerving.
Give me a number, give me a date, and I can work towards that!
There’s nothing wrong with that, so there’s nothing wrong with targets. As I said, if you say you want to lose a certain amount of weight by a certain date, that’s actually very helpful.
But the question is how we get there.
The traditional model is, “Right I need everybody in the company to hit this number, I need your team to hit this number by year-end. And it’s usually annual because that’s when we pay taxes.
So Team One performs well. And when we’re doing well, everybody’s happy; but when we’re doing badly, everybody’s bad and sad. People are quitting and getting fired. There are layoffs after one quarter because we missed the numbers. But at the end of the year we have a hard promotion and we hit the target number by the target date. And that leader and that team is given a bonus.
Which sends a message to the rest of the company: ‘If this is how you do business, you’ll do very well here.’
Then there’s Team Two, that’s really well led. Morale is really good all the time, no one quits, no one’s getting laid off. You ask the people, they all love their jobs. Everything’s great, same target. At the end of 12 months they miss the target. We give that team and that leader nothing.
So basically we’re saying: ‘If you run your business this way you won’t do well at this company.’
I don’t have a problem with Team Two because it is going to hit the target in 14 months. But it missed the arbitrary date and the arbitrary projection.
And so we have to consider not just if they make it, but how they make it.
Team Two should be respected more than Team One because it produces good steady growth, which is what keeps companies healthy. Team One looks good on paper but it’s destroying the people and it’s destroying the culture, and it just can’t last.
So I don’t have any problem with targets, but are they absolute? And are we considering the manner in which we achieve our goals?
I had the opportunity to meet with somebody from the (US Navy) SEAL Teams. The SEALs are one of the highest performing organizations on the planet.
I asked them: ‘How do you choose people for a team?’
I was told that they look at two metrics, two axes: performance (on the battlefield) and trust.
Regarding performance: Do you make the metrics? Do you make the numbers? Like, do you hit the revenue targets?
But regarding trust, I may trust you with my life, but I don’t trust you with my money or my wife. That’s how they put it.
Clearly nobody wants a low performer of low trust on the team. Clearly everybody wants a high performer of high trust.
But what they also learned is that the high performer of low trust, is a toxic team member. He eventually becomes a toxic leader if we keep promoting him. But he is a toxic team member. So they would rather have a medium performer of high trust. And sometimes even a low performer of high trust.
We have a million metrics at work for performance and we have negligible to no metrics for trust. It’s not that we don’t care about these things, it’s that we don’t know how to recognize these things. We don’t know who these people are.
But sometimes we do, and we say: ‘Why do you let that person to be in a team?’ And the reply is: ‘Ah, their numbers are so good.’
In other words we allow these people to stay even though they’re pulling down the performance of everybody else. Now that doesn’t mean we should immediately fire them. Just Iike I don’t believe you should immediately fire a low performer.
You should coach them and help them get their performance up. If somebody is of low trust we should coach them. But if they prove to be uncoachable, the cause is bigger than any of us and so it’s time to find some place where they would be happier. Because clearly if we’re not happy I can guarantee you’re not happy.
So here’s the joke: it is unbelievably easy to find these people. Just go to any team and ask who’s the asshole and they’ll all point to the same person.