Leaders must always be monitoring their metrics to keep the ship steered in the right direction and continuing to make adjustments. These metrics, or KPI’s, are critical to the company’s health, and can be anything from net profit to EBIDTA to market share. However, just knowing how the dashboard is working is not enough, any more than having a fever and taking your temperature every day to monitor it, without taking the meds or resting. Knowing the metrics is simply a way of keeping score.
Reverse engineering leadership is a phrase I came up with to describe how the leader can use the metrics in a way that is useful and adds value to the organization. The term “reverse engineering” historically describes the process of improving something, say, a computer, by investigating its present functioning, in order to understand its inner structure, and thus make it better. I had a fan in my house break and the handyman simply took the whole thing apart, with pieces all over the place. Then he figured out what was wrong and made it better. He was a “reverse engineer.”
In the same way, use your metrics to go deeper into the DNA of your organization, and you’ll learn a great deal about its innards. Then you are on the way to permanent improvements, not just band aid fixes. For example, a low month in sales could point to any of the following:
• A leadership problem in your sales management staff
• A lack of clarity for your sales staff, in the areas of pricing, market issues and sales tactics
• A cultural issue, for example, a sales staff who are not being engaged with personally, only given quotas
• Another cultural issue, for example, no clear motivational expectation system of what is required
• A market shift
• A competition issue
• A product that is not as relevant as it once was, requiring more research into future trends
Here is the point: a red flag metric can point to more than one cause. Don’t get stuck in the traps of either trying to make the numbers get better by simply working harder, which is usually not the answer; or trying to have “one size fits all” in the answer. There is an old Buddhist proverb that says, “Beware the person whose only tool is a hammer, for he sees every problem as a nail.” You see leaders make this mistake with their one hammer, for example the hammer of:
• Comp package
• Random tactical answers to deep cultural problems (“maybe if we have a barbecue once a month that will fix the culture of fear”
• Positive thinking without dealing with negative reality
• Getting frustrated and having tirades which then cause the staff to lose respect
The advice I always give my consulting clients is this: Dig into several things and ask “Why” about them. Now you are reverse engineering:
• How aligned are our people with our mission, vision and values?
• Do we have the right people on the right bus?
• Is our culture healthy?
• Are our systems and processes adequate?
• Do our teams work and play well together?
95% of the time you’ll find your answer. Reverse engineering leadership works.