Sagacious Think

When I assumed the role of Director of Operations for a telecommunications company, the development team was wrapping up the initial construction of the networks for which I assumed responsibility. Accolades flowed for the team, as they had completed the network early with customers were signed ahead of schedule. As I was new to the company, I thought this was an auspicious start to be part of such a dynamic and active team. Little did I know.

I learned that the metrics used to rate the development team were:

• speed to market – credit for bringing projects in early
• number of customers signed – the more prestigious the better

These metrics certainly seemed reasonable, and I’ve seen many companies use similar ones. However, the outcome could not have been desired and was indicative of further problems with the company, that culminated in Chapter 11.

Notice that speed to market is paramont, but no mention is made of performing this work cost effectively. The development team had blown through their budget, and mine – the funds I needed to operate a $150 million dollar network, with a staff of about 40, for the coming year.

Nevertheless, they met their metrics.

Remember they also signed a number of prestigious customers. One day, the Director of Business Development, who joined the firm after me, came to me in disgust. He had reviewed the agreements and found that, not only, were the terms unfavorable for our company, but in some cases we even lost money while tied to long term contracts. Given some of the contract conditions we tied up valuable, finite resources we could not provide others, so we were hampered by our ability to bring on additional customers to help increase the revenue for our networks.

Consider that the goal was to bring on customers early. Long term benefits, in the form of revenue generating agreements, were not considered. Nor was the prudent use of the network infrastructure.

Nevertheless, they met their metrics.

We all strive to meet metrics, and it is certainly easier to work to near term goals. But consider, when you ask people to work towards those goals, they take you literally. They focus on meeting the conditions, and checking the boxes required to obtain that promotion or bonus. The outcome may not be expected, or in your company’s best interest.