Metric Overload Syndrome

Following the adage, "what gets measured, gets managed," many managers (my early CEO-self included), think that every every process and every data point needs to be distilled into a "metric" that is tracked and reported and monitored.  That approach inevitably leads to "metric overload" a syndrome whose primary symptom is an abundance of numbers and graphs and trends followed by a general lack of true understanding.  Some managers get so caught up in the process that they spend as much time designing dashboards and driving their teams to assemble and mine increasingly meaningless and arcane minutia as they do actually growing the business they are trying to measure.  This "metric overload syndrome" has only gotten worse as data has proliferated and databases grown.

Complex dashboards filled with esoteric data points can actually serve to distract attention from the true key drivers of a business.  They can lull managers into a false sense of security thinking that "ok, we are tracking everything so we must have a handle on things."    In fact, a preponderance of metrics generally means that the team doesn't truly understand the essence of the business at its core.  They are monitoring many things leading to a lack of focus meanwhile the business is stalled, profitability flat and true product innovation is nowhere to be found.

In short, "management" may boil down to measurement but leadership certainly doesn't.  Leadership is found in understanding a business at such an intuitive level that you instinctively zero in on the small number of elegantly simple metrics that truly reflect the health and prospects of a business.  It is easy for a smart person to come up with a lot of things to track and monitor.  It takes far more effort and work to get to the point where a few well-designed, simple and instantaneously understandable metrics are used to illustrate the trajectory of a business.

One salient example of this point for me is the progression of how we tracked customer AR during my tenure at MDeverywhere.  Initially we started out measuring all the usual statistics- days in AR, percentage of AR over 120+, percentage of AR between 90-120 days, patient AR vs. payor AR, AR by payor, AR by provider, AR by procedure and/or visit type, etc.  As our customer base grew, this report also grew - exponentially.  It soon got to be such a tome that it became very time consuming to produce at the same time that it was becoming increasingly useless as a tool for senior management to quickly assess the health of this key process.  And while each of these data points are interesting and potentially important in specific instances or scenarios, they all represent lagging indicators - indicators that tell you there is a problem only once it has been around awhile when it is likely to be difficult to fix.  

Then came a big "aha" - instead of tracking a complex and muddy soup of metrics that often hid the underlying meat of the matter, we realized that the health of these important processes could be boiled down into three simple numbers - all of which should be at or very close to 100%.  Clean Claim Rate, Percent of Denials Worked within 5 days and Initial Resolution Rate.  A quick scan of three numbers for every client every month with anything below 100% flagged, told us immediately if there was an issue brewing - one that would have shown up eventually somewhere in the morass of lagging indicators that we used to track.  What was once of report of 100 pages or more became a report of 2-3 pages.  Not only were we finally tracking the right thing - enabling us to quickly zero in on issues before they became problems, we freed up precious time and mindshare to tackle other issues requiring real creativity and blue sky thinking.

This is just one example of many that I can think of throughout my career.  Whenever something seems overly complex or complicated, I know that we haven't yet done the hard work to distill it to its essence, that we don't yet fully have a handle on it.  Complexity is easy, it is simplicity that takes hard work and leadership.