I was thinking about how we get so much data in corporate reporting, and yet we are so often surprised by the business outcomes. I saw a post by Justin Custer (cxconnect.ai) that brought home the point with a key quote “measurement without meaning is just expensive confusion,” and it reminded me of the lyrics to the Talking Heads song "Crosseyed And Painless”:
Facts are simple and facts are straight
Facts are lazy and facts are late
Facts all come with points of view
Facts don't do what I want them to
So much of corporate reporting is measurement of facts without interpretation and meaningful context. However, each line of the Talking Heads song points to a different element of the information problem.
‘Facts are simple and facts are straight’ — Many of the operational measures reported by companies are what I have often referred to as ‘feel good metrics.’ These are the simple numbers that measure metrics that sound like good news, even if they are really just hollow statistics. For example, website visits. It feels good to know that more people are visiting the website, but as we learned early in the .com era, eyeballs do not equate to value. Visitors that do not act have little value, and an increase in visitors may be due to casting a wider marketing net that has little to do with the Ideal Customer Profile (ICP). More visitors may translate into less efficiency down the funnel and wasted sales time. It is a simple fact that makes us feel good, but conveys very little meaning.
‘Facts are lazy and facts are late’ — This one is easy. Presenting facts without context or interpretation is just lazy behavior. My constant admonishment is that there has to be a reason to report every number, and the author has to answer the ‘so what?’ question. Tell me why I care about this fact, and what it means for the business. If you say we coded 12 use cases, is that good or bad? Why do I care? So what?
The second half of the quote is ‘Facts are late,’ and this is really a problem in corporate reporting. We typically are driving the company by looking in the rearview mirror. The facts being reported are measures of things that already happened, and the longer the period between measurement and reporting, the worse it gets. If the accounting team takes three weeks to close the monthly books, by the time they report the results for one month it is too late to make course corrections for the next month. It is even worse if the reporting is quarterly. Facts have to be reported in a timely enough manner to act upon the data. Otherwise, we risk realizing we needed to change direction long after we already ran off the cliff. I am an advocate of near-realtime reporting, even if it is not 100% accurate. A flash view of directional information affords an opportunity to act, even if we do not have all of the facts.
‘Facts all come with points of view’ — Having just said that facts need to have context and answer the ‘so what’ question, we have to acknowledge that interpretation will come with a point of view. Whoever reports the results will have a bias, and will be out to make a point. The sales person with ‘happy ears’ will present the pipeline in a positive context, while the sales-ops person may read the same facts and report a pessimistic view of potential bookings. As a recipient of the reporting, it is often challenging, but important, to discern the point of view and weigh it in the context of interpreting the information. Probing for alternative interpretations or points of view can help to tease out the real meaning of the facts.
‘Facts don’t do what I want them to’ — Sometimes the facts just are the facts, and facts do not lie. Despite all the interpretation and spin, you cannot escape hard facts. There really is no such thing as ‘alternative facts.’ It is just being selective about which facts you choose to acknowledge. In the sales world, this is prevalent in win/loss analysis. The fact might be that we are losing a lot of deals, and there is no escaping that we are missing our sales targets. You can focus on lead quality, or product features, or sales talent, but you cannot make the facts say that sales are going well. The facts just won’t do what you want them to.
Boards of directors and leadership teams need to recognize when the reporting they receive is faulty. Too many surprises despite comprehensive reporting is an indicator that the measurements are creating “expensive confusion” instead of meaningful interpretation. Often, less is more when reporting facts, if it is accompanied by thoughtful unbiased narrative that delivers actionable understanding.