🚨 THE KPI TRAP: Why Performance Metrics Destroy Team Accountability

🔍 Ever been measured on KPIs that made you game the system? In this eye-opening episode about performance measurement mistakes, Gino Marckx and Wayne Hetherington reveal how your well-intentioned metrics might be DESTROYING team accountability and causing serious productivity issues! 😱

🔥 You'll discover:
- Why tracking sprint velocity and story points might be HURTING your project
- The shocking ways teams manipulate agile metrics to look good
- How performance measurements designed for accountability actually DESTROY team ownership
- The ONE question to ask before implementing any KPI or measurement system
- Why managers are completely WASTING TIME with metrics that don't align with organizational goals

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Learn more about alternatives to velocity tracking and preventing metric manipulation on our website: https://xodiac.ca/

Questions Answered

0:36 What are the problems with KPIs that aren't aligned with organizational goals?

 1:09 What are real-world examples of misaligned KPIs? 

2:31 Why do organizations implement KPIs that don't align with goals? 

6:03 How do metrics designed for accountability actually reduce ownership? 

7:16 What are ways teams manipulate metrics to look good? 

8:19 How do misaligned KPIs create blame cultures? 

9:28 What should we actually measure instead? 

11:00 How do we make metrics truly actionable?

Contact us at feedback@goodintentionsbadoutcomes.org

Chapters

• 0:00 Introduction
• 0:42 The KPI alignment problem
• 1:15 Real-world story points manipulation
• 2:37 Why KPIs fail in practice
• 6:09 The accountability paradox explained
• 7:22 How teams game the system
• 8:25 When metrics create blame cultures
• 9:34 Measuring what actually matters
• 11:06 Creating truly actionable metrics

Transcript

[0:02-0:15] Hello everyone. Welcome to Good Intentions and Bad Outcomes, a podcast about challenges and practices you might encounter in the workplace, where good intentions have unintended and oftentimes unnoticed consequences.

[0:15-0:17] I am Gino.

[0:16-0:17] And I'm Wayne.

[0:17-0:34] Every time we share a situation where we or our listeners have seen that there are some things that while they were well-intentioned, they really have bad outcomes. We discussed the what and the why, and we try to come up with alternatives on the spot. So, let's get started.

[0:36-0:51] So today we're going to talk about the mistake of assigning KPIs, at least we think it's a mistake, assigning KPIs that are not aligned with organizational goals. Wayne, have you seen this in the past?

[0:51-1:01] Oh, I see metrics, questions and problems come up all over the place all the time. This is, this is a pretty common thing, I think. Have you seen it too?

[1:01-1:09] I, I did for sure. Could you, could you give an example of what such a KPI would be that is misaligned with an organizational goal?

[1:09-1:41] A specific example, I don't know if I can come up with a specific one, but I've often seen managers set a KPI for a team or even sometimes an individual. You're going to, you know, this is your goal, you're going to meet this. I'm gonna measure you on this thing and, maybe it's, I don't know, a common one is velocity, you know, your team has a KPI of, you know, 40 story points per sprint. See if you can do it.

[1:41-1:58] Yeah, I, I, well, I, I don't mind, because I can, if, if I would be part of that team, I can totally make that happen, right? There's, there's many, many wonderful techniques, but whether or not it would achieve the intent of that particular metric, that's a different story.

[1:58-2:17] So I'll, I'll give you another example, an example as well, where people are measured on delivering a particular Deliverable project pro feature name it by a certain time, by a certain date, and, and yeah, people are measured to that.

[2:17-2:31] So where does that kind of come from, Wayne, what are, what are the situations that or what are the circumstances that lead to this happening?

[2:31-3:00] Well, I, I, I think, as I'm, as I'm thinking about this, normally what I've seen is, again, maybe two issues that that managers or leaders are trying to deal with. One is accountability. So they'd like to have their people take ownership of things. They want to, you know, they want them to feel accountable for the things that that are happening. And so they feel that if they put a measurement on it, people are going to feel accountable for this. They're trying to engender that accountability.

[3:00-3:13] Yeah. And then I, I think the other, the other second thing I've seen is sometimes they just need something to measure. They can't tell what's going on. They're flying blind, so, you know, they want to measure something, so they put a KPI in there to see what's happening.

[3:13-3:38] Yeah, and I, I think to add a few things there, it's also based on assumptions, of course, that what they are measuring would lead to what they really want to see, right? For instance, if we delivered this particular project on time, then we'll Get the benefits that are part of our business case in the first place.

[3:38-4:05] Now, of course, that that's based on assumptions that all of the features that are identified as part of the business case will indeed lead to those benefits. That means that the, the users are responding in a way that you intended, that means that Probably external factors are also not playing a negative role in the realization of your benefits.

[4:05-4:22] There's a whole bunch of things that this means and assumptions that would need to be true in order for that to be in order for that measurement to even lead to something.

[4:22-4:37] Yeah, it also, it also means, of course, that you, you can't really take any changes into account. You, you can't listen to your clients and say, OK, what you say, the feedback that you have makes sense.

[4:37-4:53] So let's adjust our strategy and let's make sure that we, build these features or build them differently so that they work better for you. All of these things, of course, we can't do if, if we are Measured, or, or at least we're discouraged to do if we are measured to deliver a certain set of features, a certain scope by a certain time, right?

[4:53-5:10] So, yes, go ahead, Wayne, you were about to say something. Well, I'm, I'm hearing, I'm hearing that there are some good intentions in, in putting KPIs in place, but there's, there, there seems to be like almost a feeling that there's some bad outcomes that might result from doing that.

[5:10-5:19] You're you're hinting around that. Is, is there some actually really bad things that happen when we start putting on a, a KPI slapping a number on things?

[5:19-5:30] Well, so, yes, for sure. There, there's a, there's a number of things. So, first of all, we are talking about slapping KPIs on two things, so that means it's an external pressure, if you will, to measure certain things.

[5:30-5:42] And the second thing is what is measured. So there's two elements that I that I kind of want to unpack here.

[5:42-6:03] So the, the downside of indeed measuring or or Or giving in, giving KPIs to somebody else and say like I will measure you on this actually takes the ownership of that particular measurement completely away from the, the person or the team being measured.

[6:03-6:16] You mentioned in initially that One of the, the reasons why this is happening is because people believe that with a certain measurement there's going to be increased accountability.

[6:16-6:25] Here you actually get the exact opposite, right? If you are going to measure me this way, well, I'm gonna make sure that those measurements look good, right?

[6:25-6:33] And I mean, if it's easy to achieve it, great, but if it's easy to achieve it, it's already a worthless measurement, right?

[6:33-6:41] But if it's not easy to achieve, well, I'm gonna do, I'm gonna use different strategies. This is just in our nature to make sure that this metric looks good.

[6:41-6:52] You give the example of us needing to hit a velocity of 40 story points. Well, there's a there's a gazillion ways in which I can hit 40 story points.

[6:52-7:00] One, I can Inflate my estimates of all of those stories. That's gonna be a first one, that I can use.

[7:00-7:08] The second one is, well, I can deliver those stories with lesser quality and still consider them done, and if they are done.

[7:08-7:16] I mean, the fact that they're, they found bugs afterwards, well, that's, that's somebody else's problem, and I have hit my story points at least.

[7:16-7:27] Another one might be, you know what, we're gonna start calling a story done before it actually finishes the entire workflow, before it's ready to be deployed into production.

[7:27-7:37] So like, well, these are tricks and you're kind of avoiding responsibility, but this is the reality. This is what happens. This is what people do.

[7:37-7:52] So, you're really taking accountability away and discouraging people from taking ownership altogether because they do not have any say in in how they are going to measure and be measured and what is important.

[7:52-8:06] That's only one so interesting you say that because I, I, I, I'm sure it was a joke, but I actually saw a Kanban board one time with column names to do, doing and almost done. And then done.

[8:06-8:12] So we got it into the almost done column, but don't see that that's an interesting one.

[8:12-8:19] Yeah, yeah, I think they're making a joke about it, but yeah, people will do all kinds of things in order to try to hit that number.

[8:19-8:39] The other extension on that I think is not just reduced accountability or reduced ownership, but also the, the promotion of a blame type of culture because as soon as you get That a number that's assigned to you that you're going to have to meet and for whatever reason it doesn't happen now you're coming up with an excuse about why it didn't happen.

[8:39-8:54] Oh, it was, you know, I was waiting for the other team. I couldn't, I couldn't get this finished because it was their fault or the the system went down. We, we, we, we couldn't do it because the, you know, because of this, because of that, and all of a sudden.

[8:54-9:01] We have a blame culture where we're making excuses for everything all the time rather than actually trying to figure out how we make this thing better.

[9:01-9:04] That's right. So blame and justification there.

[9:04-9:20] And now when we're when we're looking more about the the nature of the metric itself and yeah, what we're measuring, then we are we're measuring things that that might not give us any insight at all to Our progress?

[9:20-9:28] Are we making progress? What do we need to do to to help get this this thing back on the rails, right?

[9:28-9:39] Like for instance, 40 story points, while we have 35, well. What does that mean? Is that good? Is that bad? Or maybe those 35 story points are the most valuable features that you can ever deliver, right?

[9:39-9:53] It's perfect for your client and your client is super, super happy that it only took them, let's say 2 weeks to get access to this feature. They don't care that it's 35 story points or 50, right? But they get the functionality that they want.

[9:53-10:03] So is that really a good measurement of your, of your outcome? Is it really what you're trying to achieve? So that's just as an example there.

[10:03-10:15] Of course there's other things as well. Go ahead. Well, I, I think you're, you're, you're touching on the point that you made originally was that just putting a number on something doesn't necessarily mean you're going to get the outcome that you want.

[10:15-10:25] So there's, there's, we have to be careful not to put in a KPI that is not aligned with the project goals or the company goals.

[10:25-10:32] Just having a number on something may not actually get us to where we want to go, even if we do have visibility on it.

[10:32-10:40] Yeah, and I'm mindful as well that we're talking about KPIs here, right? So do not confuse them with key results or with, with other measurements.

[10:40-10:49] We're talking about KPIs which are kind of operational metrics and that we kind of wanna, wanna, wanna measure.

[10:49-11:00] But there's a, there's a really good book that, I believe it's called How to Me Anything. It's just, off the cuff right now. I'm just thinking about it.

[11:00-11:14] And, in the first chapter, they're talking about the fact that If you don't know how to respond to a measurement, don't measure it. Do not waste your time measuring it.

[11:14-11:28] So make sure that any measurement that you that you have, whether it's a KPI or anything else, that you know how to respond to the outcome of that particular metric.

[11:28-11:38] OK, there's 35 story points, so what are you gonna do? is that, is that a concern or you're just going to, report it and say like, hey, yeah, this, this is not great.

[11:38-11:47] OK, next, next sprint, 40 points. Oh, this is great, next sprint. So there's really nothing that you're doing there, right?

[11:47-12:19] If on the other hand you say, well, we're going to measure, the, the number of System failures that we had throughout the week and if we have 3 weeks in a row, we have a system failure, well, then we need to go and look, or 3, or in the period of 3 weeks we have 3 system failures, then we need to go and have a look at what's happening.

[12:19-12:39] I mean, sure. There might be a system failure, it might happen. it, it might be a random thing. Maybe we always want to go and look into it, but if it's 3, we really have to stop everything, what we're doing, go and look into what the system is, and what's going on, what's causing this issue to happen, and and resolve it.

[12:39-12:52] Just as an example, it's probably not the best one because you really don't want any system failures, but you kind of get the point. You need to understand what How you're going to respond to a measurement for the measurement to be valuable in the first place.

[12:52-13:07] That's right. I, I, I think I've heard the term applied actionable metrics. So you want to measure something that that allows you to take a reasonable action, and maybe it's reactive or maybe it's proactive, but it's still an action.

[13:07-13:13] And if the number doesn't give you anything that you can make a decision on, then it's probably not a good measurement at all.

[13:13-13:25] So, 11 question, I, I like to ask managers who are requesting a certain measurement is if I give you this measurement. What can you do to help me with it?

[13:25-13:36] Yes, right. And, and if they can't, if they can't come up with anything, if it, if it's not like I'm gonna give you X number of dollars to make sure that the system stays up for, you know, it doesn't have a system failure, then really doesn't matter if I measure it or not.

[13:36-13:41] If we're not prepared to do anything about it, why even bother measuring it? There you go.

[13:41-13:48] So this was it for today. Let's make this a short one. we have more podcasts coming up.

[13:48-14:00] I, I hope you enjoyed this one. if you have any situation at work in the past or right now that you feel has unintended bad outcomes, please let us know and we might discuss it in one of our future episodes.

[14:00-14:02] Thanks again, Wayne.

[14:02] Thank you, Gino.