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Why Less Data Creates a Better Culture

Your people are with you because they love your culture. There’s something about the way you run your business that fits them. They like each other, and they like your customers. Every leader who's ever run a successful team knows how important those intangibles are. Your culture feeds your success.

You want to take full advantage of the commitment it creates. Your people want to succeed together, and you want to let them. But you can’t really measure culture directly. By itself culture really isn’t a business goal. It’s important, but for it to produce results you want to take advantage of the way it helps people collaborate.

Work has to be part of that culture, but also separate from it in a way. For that to happen, the business part has to be as concrete as possible. When the business part is based entirely on facts, it’s much easier for your people to enjoy working towards your strategic goals. They can look at the facts and then team up to make them change the way you want. In fact, they become more of a team when their work is measured objectively.

Easier Said Than Done

I have the opportunity to work with CEOs every day, and nine out of ten of them tell me that they want to have greater visibility into what their employees are doing. But they want to do it in such a way that they don’t come across like “Big Brother” suspiciously spying. They want to keep their culture positive, but for the business to survive, they also need to know that they’re making progress on the business.

You can imagine how a traditional approach to this problem can backfire. Traditionally, the CEO might hold a meeting and show a chart of monthly revenue, for example. If the numbers were off track, he might start asking questions to figure out why. In no time, a meeting like that can become negative. If people don’t know how their performance is measured, they get defensive very quickly if it seems like someone’s holding them responsible for something they can't really control. It can become a hunt for the person or persons who didn’t measure up, and that can have a really bad effect on culture.

In today’s workplace, with so much data available, an approach like that can also become overwhelmingly complex. One of the ways people will explain themselves is to list off all the different things they’re doing. When each department has their own dedicated application, sometimes different groups have a hard time even understanding what the other ones are trying to say.

Add that to the meeting, and nothing gets accomplished. The CEO started out wanting clarity, and instead he ends up confusing himself and everyone else. Everyone feels bad, but no one knows what to do about it.

One Transition, Years of Returns

The leaders I get to work with are determined to avoid that. They realize that if they’re struggling to have clarity about what’s happening, then their people are, too.

They realize that there’s no quick fix. And they also realize that a long-term, systematic solution will produce long-term, increasing returns. If everyone is clear about how to succeed, then the culture can thrive uninterrupted, and the business benefits from both.

The first step to creating that clarity is to look at all the complexity for each team. People working in Salesforce, for example, have enormous amounts of data and functionality at their fingertips. So much so that if they showed everything they knew to other people in the company they would probably just confuse them. The same can be said for every other team, from inventory to distribution to finance. In that meeting about revenue, they would be able to produce an endless stream of data about how hard they were trying.

That’s great, and it’s extremely useful for each team. But it’s not clear – unless it’s understood that all of that activity is supposed to move a few key metrics. Identifying those key metrics – Key Performance Indicators – changes everything.

For virtually any business team there are at most four KPIs that sum up what that team adds to the business on a daily, weekly and monthly basis. Very rarely do you need more than four, and most of the time all you need is one or two. The fewer the better, because that’s clarity. It’s clarity for every person on the team. All their expertise now makes sense. Their team is supposed to make those KPIs move.

It has a cultural impact at the team level, because now everyone can work together and collaborate with a clear understanding of how their work will be evaluated. At the big meeting where the whole company was held responsible for revenue, no one knew how to respond to a problem. But now the team knows what they’re supposed to do, and if they can do it, then they also know that they made their contribution.

Even better, the rest of the company can understand it, too. Each team can understand what the other teams contribute, and each person can reach a high-level understanding of how the whole business fits together.

This builds confidence. It empowers people to bring their best ideas and their best efforts. Which means it frees your culture to accomplish all that it can.