Going deeper with vanity metrics

In my previous post, I discussed vanity metrics and why they can create problems for managers. But are vanity metrics all bad? And can anything be done to improve upon them?

To answer these questions, let's return to why vanity metrics are so common: (1) they're superficially easy to measure; and (2) they make you feel like you're making progress.

Often, vanity metrics are used (and can be useful) to "manage up." If your supervisors don't especially understand the domain you operate in, vanity metrics can provide the 30,000-foot view that executives often desire. Unless you need an executive to do something, a vanity metric is an efficient way to measure something to give the impression of making progress.[1]

But what if you want the executive to do something? In those case, vanity metrics suffer because they're often not actionable. Take the example of "number of customers contacted" in a sales environment. Suppose you've done your homework and concluded that you need more people to help in your sales team. If you present that vanity metric, my bet is that your executive might ask whether you can get more with your existing staff. Why not, for example, just make more contacts and track your progress? A vanity metric can backfire on you pretty quickly.

If you have a vanity metric because it's easy to measure, you may want to consider reframing your vanity metric into a more goal-oriented metric. Rather than "number of customers contacted," you might establish a "revenue per qualified lead" score and then show that, if you increase the number of qualified leads, you can increase revenue for the company. Here, it would be harder for an executive to simply ask for more customer contacts, because that would dilute the ratio of qualified leads. And framing the metric around revenue allows the executive to make the business case to the rest of the executive team that this investment is not a zero-sum investment.

In other words, a small adjustment to a vanity metric can allow a manger to better support her team, without creating extra burden.

Have you ever reframed a vanity metric to a goal-oriented metric? Has it worked for you? Let me know in the comments!

[1] I'm not making a value judgment here. It's the responsibility of executives (as managers of mangers) to understand whether a metric is useful. If an executive is satisfied with a vanity metric (for whatever reason), I pass no judgment on a manager's use of that metric as part of her reporting duties.