Many organisations have a culture where inaccurate good news is preferred over accurate bad news. Leaders and organisations need to be comfortable with getting feedback from their performance measures and KPIs. Cultures that accept inaccurate good news do not learn how to continually improve performance.
The Allure of Inaccurate Good News
“Accurate bad news is far superior to inaccurate good news. Inaccurate good news causes us to make incredibly poor decisions that seem right at the time, but we don’t find out til much later”. David Binetti in a Lean Start Up Strategy presentation in 2015. This insight is profound. Sometimes a simple insight can provide so much clarity.
Many organisations have a culture where inaccurate good news is preferred over accurate bad news.
KPIs and performance measures only give us feedback on what is happening. It is people that make the judgement on whether it is good or bad.
Judgement is a Barrier
In working with many and various organisations to implement PuMP (the performance measurement methodology), I often found teams saying, in Step 2, “we can’t say that our result is that we want to be ‘the employer of choice’, because we will never get there“.
Okay, so we don’t state this as a result we want to pursue and measure, because we will never achieve it. Why, because we are judging the (yet to be developed) measurement, that it will be bad news. And we don’t want to deliver bad news, many workplace cultures are far more comfortable to deliver good news, even if it is not that accurate.
The Performance Measure is Feedback
When teams are in Step 3 of PuMP and designing measures for their results, part of the measure design technique is to select measures based on their feasibility and strength to providing feedback about the result. Performance measures with a high strength will be good indicators that we are making progress towards that result. However, teams will discount some measures, because “we know that the data will deliver bad news“.
It seems to me that we have a propensity to want to deliver only good news.
Maybe it is the way leaders react to bad news..?
This propensity to want to deliver good news seems to lead us to not be clear with the results we want to make progress towards. We get vague about what we want to achieve, so that we don’t have to deal with the bad news.
This also leads us to developing performance measures that are, typically, easy to produce, the counts of activity, milestones and the data we know we can get. Avoiding bad news like the plague.
Binetti’s insight here is that accurate bad news is far superior to inaccurate good news. Accurate data and measurement provides us with the feedback we need to adjust our actions so that we can make progress towards the result we want. Even if we will never get there, we need to be consciously aware of how close we can get, before we make the decision that, “this is close enough for us”. Only accurate measurement will inform that decision.
Inaccurate good news makes us feel good, even if we really know it is not leading us towards our vague end goal. It seems to give us a satisfier now, rather than the kick in the pants we need. Perhaps like eating a box of chocolates when long term goal is to drop fat and improve fitness.
Being clear with the results we want to achieve, is obviously beneficial. Developing performance measures that provide feedback about how we are progressing towards our results, is likewise beneficial. Using accurate data is clearly more useful than inaccurate data.
Let’s be aware of any organisational or cultural bias towards inaccurate good news, rather than accurate news. The good and bad is a judgement, measurement is a about learning, not judging.
Let’s be clear with our results, accurate measurement so we can learn how to improve performance.
Visit my page on PuMP and KPIs where you can find out more about this approach and access whitepapers.