“People, Products, Profits. In that order”
Ken Goldstein
The company Amazon has seen some tremendous growth over the past several years. With this growth came some unexpected demands. I recently watched a documentary on the company highlighting these challenges. The biggest issues have come from team members working in fulfillment centers.
Fulfillment centers are large warehouses scattered across the United States. Staff work to “fulfill”customer orders. Workers interviewed described the working conditions and pace as not sustainable.
A local emergency room physician near one of the centers wrote a complaint letter to OSHA after seeing so many employees with work related conditions come into the emergency department.
It was clear in the interview that these employees were pushed very much by data. Certain targets were set for fulfilling orders and if they were successful, they got pushed a little harder and then a little harder until the pace became unsustainable.
There was a big disconnect between the expectations of the data and the actual working conditions. The employees felt like they were nothing more than a number in a large experiment.
Data is King
Famous venture capitalist ,Ben Horowitz, in his book The Hard Thing About Hard Things calls this phenomena “managing by numbers”. He states, “…managing by numbers is like painting by numbers-it’s strictly for amateurs.”
While the growth of data and analytics has done great things for many companies it is interesting to see that engagement is often low at many of these same companies.
This was a common theme in the Amazon documentary. Employees are feeling less like humans and more like numbers which go on a scorecard for executives to review and make arbitrary decisions about. Decisions often made in isolation not fully considering the impact it has on employees.
While data may be king, many employees feel like they are the pawns.
Metrics Hijack Strategy
In their Harvard Business Review article “Are Metrics Undermining Your Business? ” Michael Harris and Bill Taler discuss the concept of surrogation which occurs when organizations replace strategy with metrics.
They use the example of Wells Fargo pushing their associates to have certain quotas of new accounts which led to questionable cross selling schemes. While these employees were meeting the metrics, in the end it cost the company billions of dollars in fees and fines which I am sure that was not part of their strategy.
Surrogation can occur at a much smaller scale. A local business that wants to provide the best place to work for your employees, yet holds managers to unreasonable metrics. This creates moral dilemma for the team.
Do you press the team harder even though you know it is not reasonable?
No People No Data.
Remember you need people to have data. The less your employees feel like humans and the more they feel like an arbitrary number the harder it will be to keep them engaged. At the end of the day if can’t keep good people, you can’t keep good data and your dashboards fall flat.
The Metrics Need to Make Sense.
Sometimes the worst thing an employee can hear is that a new scorecard for their department is coming.
Why?
Because typically the metrics are set in the C-Suite or Board Room without any input from the front-line staff. These metrics often have clear disconnect from who is doing the work and the expected results of the work.
Just like the Amazon example.
A computer benchmark was telling the executives how many orders each individual should be filling, but no executives were present in the warehouse with temperatures >110 degrees Fahrenheit seeing how unreasonable that benchmark was.
If you are a leader and you are setting goals for a team, engage the team first then the data. Only when you have the full picture does it make sense.
People > Metrics
People need to feel like they are more than numbers. Referencing benchmarks, top deciles, KPI’s falls flat with the front lines if they were not involved in the creation or understand the why.
This is where we as leaders need to step up our game. We need to explain why a metric was chosen.
We need to explain the importance of the metric.
Most importantly we need to engage front line staff to see if we are providing them with the tools and space to actually make it work.
Remember everything looks possible on an Excel spreadsheet.