Organizations that blindly chase KPIs create toxic cultures because data ignores the human factor and long-term impact. Leaders must consciously counter balance these inherent data shortcomings.
Organizations that are primarily optimized based on KPI's have a tendency to achieve their goals at the cost of sustainable success, in a way that creates competition between siloed teams, and that makes fundamental innovation hard.
Ballet: A Perfect Model for a Toxic Workplace
Ballet is a perfect example of an environment that almost inevitably creates toxic cultures. There are three reasons:
- Quality and quantity of output are hard to measure
- There's an intense scarcity of open positions and an abundance of talent eager to take those positions
- As a consequence of 1 and 2 there's a strong hierarchy between teachers and students
My wife was expected to train six days a week, eleven hours a day, while hardly being allowed to eat and rest. If ballet were as measurable as speed skating, high jumping, or weight lifting they would have discovered 30 years ago this way of training doesn't produce the best results. Any kind of training requires a balance between hard training, rest and balanced nutrition to become the best. This balance is important both on physical and mental level. People don't object to this insane regime because they know there are a 1000 others eager to take their place. Teachers know that too.
When a Lack of Alarm Bells Breeds Abuse
Last week in the Netherlands research came out showing that four out of ten dancers was a victim of inappropriate behavior. It's even worse amongst professional dancers. It's no surprise when you realize how much pressure, and how few alarm bells this system has. Large organizations in times of job scarcity have a similar problem. There's an abundance of employees eager to get a job in a pool that is too small, which gives managers and leaders power over these people. The measurability problem is more nuanced.
The Three Universal Limitations of Data (and Why Your KPIs Lie)
Every organization is bound to three universal limitations of data:
- Long term impact is harder to prove than short term impact
- Work within organizational silos is easier to measure/optimize than work across teams
- Predicting impact of something you never tried is harder than data based optimization of existing ways of working
As a consequence, organizations that are primarily optimized based on KPI's have a tendency to achieve their goals at the cost of sustainable success, in a way that creates competition between siloed teams, and that makes fundamental innovation hard.
The Great Shift: Why the Labor Shortage is Good for Company Culture
The job scarcity problem already changed. There's now a global labour shortage. I hope this means people stop accepting bad treatment and bad cultures, because they know there are other opportunities. This would be good for organizations, because they get their alarm bells back, and can learn to serve their employees better.
Countering Data's Flaws: Leading with Data, Mind, and Heart
The universal limitations of data, and therefore of KPI-dashboards, won't go away, so managers and leaders need to consciously counter these. You can do so by leading with:
- DATA: Only make decisions based on data within the boundaries of its accuracy.
- MIND: Create strategic goals and roadmaps that fill gaps where data fails, and that help assess and reward people’s contributions to progress.
- HEART: Keep doing the right things for people and planet, even when it’s hard to prove the Return On Investment. A sense of logic and purpose should be enough for some topics.
The book Managing Without Power is now available on all local Amazon stores. Curious about what I can do for your managers and leaders? Plan an introduction meeting with me here.
