Some important pre-show questions for everyone:
- What if we had a cow hosting?
- Why are hotel doors so freaking heavy and thick, yet the walls are like paper?
- Should we start a true murder podcast?
- Have you seen the new episodes of Black Mirror?
After you answer these questions or debate these questions in your head, we’ll get into the actual focus of this episode: the good, the bad & the ugly of scoreboards.
The most visible, tangible part of a structure is the score/scoreboard.
The scoreboard is what people perceive the score to be.
If you want to know the importance of keeping score, just watch any group of 12-year-olds before and after someone says, “Hey, let’s keep score.”
What is important is to know that everyone is keeping score whether you realize that or not. Whether the score is conscious or not, everyone is keeping score. There’s always a level of internal accounting taking place, and internal accounting drives all kinds of judgments and inferences.
At the end of the day, we all ask ourselves, “Am I winning?” A lot of people mistake what the score is and what the scoreboard is. We fail to take into account the psychological and behavioral principles that score drives. So much of the way most organizations utilize metrics, scores, etc. is based on old thinking.
What’s the reason to have a scoreboard? What’s the pro of having an official scoreboard with metrics that are tracked by the organization?
If everyone is keeping score, the question is do you want them to keep score purposefully or randomly?
Far too often we mistake scores as efforts/activities. Those are things that we have high levels of control over, but they have low causality/low influence on the actual results. The score is about results, which we have very little control over, and luck plays a really big role.
We might say you need to make 100 calls. You as a sales rep need to make 100 calls, but everyone knows that 100 calls don’t matter. You need to make 100 calls to generate a result. When you do results, that’s what leads to resulting.
Resulting: the tendency to judge the decisions that you make, the actions that you take on the results.
What’s the downside of putting a scoreboard in place? What are some of the negative impacts?
There’s a principle that says - the moment you put something under observation, behaviors change. Once I know you’re observing me, my behavior changes. Goodhart’s Law states that any valuable metric stops being a valuable metric once it gets used as an objective.
An example of this: an email gets a 10% click rate and we say that the email was really successful. The email was successful because it had a 10% click rate. We establish that as an objective and we make that a metric when in fact the email wasn’t successful because it had a 10% click rate. Once we turned that into the score and put it on the scoreboard, we now have said that 10% click rate equals winning. It’s reductive.
Why have metrics? This is something Doug has been struggling with for a long time. And Doug loves data.
What you should be striving to do with metrics is to bring everyone a clear picture of where we are now. Where are the things now relative to where we need to be?
At Lift we recently rolled out a new iteration of our scoreboard - here’s a little inside look into that.
We use points for activities that are completed and we’re using that as an indicator of what’s been done and resource allocation. The team is now focused on points from the standpoint that they’re worried that they’re going to count against them. How do you avoid that from happening?
In the recent update, we took out points weighing heavily on the measurement of the team and everyone was freaked out about it. That’s a bit of an overstatement, but still. We’re meaningfully changing the way that we’re tracking things and Doug thinks people were spooked because they are worried they’re not going to get credit.
We said earlier that what matters can get reductive. The whole point of what we were doing with scorecards was to get a picture of honesty. We think a large part of the weakest element of our process and program management is that actions are being done and they aren’t being logged anywhere. They don’t show up, so we don’t know how to allocate for that in the future. By changing the number, there was a broken understanding. When you change the scoreboard, you change the game.
This is change management.
When you change the scoreboard, there’s a shock to the system. Even though Doug would rather that there not be any freak-out, he’s glad that there wasn’t a lot of buy-ins needing to happen.
The thing about change is that people respond very differently. More often than not, change is not the problem. The change isn’t what causes anxiety; it’s the anticipation of change. And unless we make this a 34-hour episode, Doug is going to be reductive; he’s really struggling with this idea around incentive compensation.
Incentive compensation is the thought that if you’re given metrics, you won’t be punished for these metrics, but if you achieve these metrics, this is your bonus. The bonus is there to increase motivation.
NEWS FLASH: that doesn’t motivate. There are plenty of studies that show the impact of financial incentives to actual no motivation. What they show is any level of motivation only goes up to a certain point when making a certain amount of money. After that it no longer motivates. The motivation there is the psychological safety and the need for more money. And to stay there people will lie, cheat and steal. We are tribal and social creatures. We want to benefit others and do well. If your goal is to get where honesty is, let’s all get as clear as we can to what is the destination. Let’s figure out how we do better, let’s win games.
The moment you start putting judgments on your metrics, that’s the moment everyone goes into resulting behavior. You encourage hiding things, etc. What we’re trying to do is the doer decider; the doer thinker. Teaching that the basis of conversation, you can’t do it without the scoreboard.
- Looking at the same picture of honesty is super important.
- Without the scoreboard, you can’t have alignment.
- When you change the scoreboard, you change the game.
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