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Managing with metrics: Watch out for unintended consequences

May 30, 2014

The revelations of mismanagement, gaming the system, and in some cases, alleged outright lying in the US Veterans administration is a sad and chilling illustration of what a “failure of leadership” looks like. According to reports by Scott Bronstein and Tom Cohen of CNN and others, people have died as a result.

“…The VA problems touch on an emotional topic—caring for America’s military veterans, many of whom served in war,” write Bronstein and Cohen. “And the revelations of scheduling tricks and secret lists to hide months-long waits for care prompted criticism of [Veterans Affairs Secretary Eric] Shinseki and the VA on both sides of the aisle…

“…CNN reported last month that in Phoenix, the department used fraudulent record-keeping—including secret lists—that covered up excessive waiting periods for veterans, some of whom died in the process.

“In a new development, Shinseki has rescinded an $8,495 bonus awarded to Phoenix VA Director Sharon Helman last month.”

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How does something like this happen to people who deserve to be treated better? Of course, the leadership at the VA, and even the managers and others directly involved with hiding the excessive wait times probably didn’t knowingly want to let anything bad happen. But they did.

There is real power and real danger in managing by metrics. Unintended consequences which are sometimes explained away as “gaming the system” are too common.

The best example of unintended consequences is the “Cobra Effect” in India. This is where the British Imperial government tried to curb the cobra population in New Delhi by putting a cash bounty on dead cobras. But that only led to more cobras because people started breeding cobras to collect the bounty! French colonial Vietnam had a similar problem with rats.

Sadly the same is true at the VA. Establishing metrics (such as wait times) to judge organizational performance is a sound leadership practice. Good leaders establish metrics and set goals for their people to achieve. But when the metrics become the sole focus, often due to incentives, and managers and employees start manipulating the metrics, things can spiral out of control pretty quickly.

What makes the failure at the VA so tragic is that most of the people involved must have lost sight of what they were actually supposed to be doing—taking care of people who made a big sacrifice for our country. Somehow the intent of the “wait time” metric was lost.

To avoid this sort of cobra effect, metrics should be used as a communication tool and must show the intent of the measurement rather than simply be used to evaluate job performance. Chances are if the VA administration leadership had been working to achieve a 7-day maximum wait time so our veterans receive the best possible care instead of, in some cases, fraudulently manipulating waiting-time lists to meet job performance goals, the outcomes would have been much better.

Situations like what’s happened at the VA can only be avoided when the leadership steps up, reminds their people how important their work is, holds them accountable when standards aren’t met, and comes down hard on anyone who manipulates the system. Without this, metrics merely breed cynics, contempt, and in some cases, outright fraud.

And we all must beware. The cobra effect can infect any company.

What unintended consequences of measurement have you seen? Share your story with us in the comments section below.

Morrow_Charley_2Charley Morrow is Vice President of Assessments at Linkage. He has over 20 years of experience designing, implementing, and evaluating training, individual assessment, and organizational-transformation interventions, and he’s an expert in developing assessments and methodologies for individual, team, and organizational motivation and performance. Follow him on Twitter @CharleyMorrow.



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