What Happens When Metrics Become Goals?
I still recall it vividly…
Our team was getting absolutely smoked on the sales leaderboard. Month after month, our numbers had gone from bad, to a singular source of embarrassment.
What made it worse, our collective morale was barely hanging on.
I stood up in our pod of cubicles. Took my wallet out and made sure everyone saw me place a bill on my desk.
“Alright” I bellowed. “Here’s a $20 bill on my desk for whoever has the most dials by the end of the day. Has to be documented in the system is the only requirement. Simple as that.”
First, blank stares. Then within moments… dials.
$20 wasn’t going to offer much for paying the bills, but over the next few hours.. we dialed relentlessly for it.
When it was all said and done, I left the Team with this:
“We leave money on the table every day we don’t view it like this.”
It hit home.
Over each of the next three months we saw an improvement in revenue sold and in placement against our peers. When one had an off-month, the others swooped in with advice and constructive critiques to lift each other up. When someone crushed quota and carried the group, we lifted them higher still.
Probably the most impactful $20 bill I ever took out of my wallet.
But… why?
Goodhart’s Law:
Originally coined in economic policy, Goodhart’s law is wildly relevant for us in sales (and leadership) today.
Charles Goodhart warned the Bank of England in the ‘70s: if you manage the economy based solely on one number, that number will become corrupted as people manipulate their behavior to hit it.
Sound familiar?
The concept behind Goodhart’s Law is simple, and it doesn’t take but a few weeks working for a micro-manager to see it:
“When metrics become goals, they open loopholes.”
What Happens When We Weaponize Metrics
Targets are supposed to guide effort and encourage employees to do their job in a manner that helps others do theirs; even if they’re downstream in the customer journey or process workflow.
However, when you tie identity, income, or job security to a single number like a quota… that number becomes “the game”.
I started my career working the night shift in a call center. The metric we were all judged on was how many service tickets you opened per call taken, even if the ticket you opened didn’t resolve… anything for the client.
Week after week, the same individual who opened three meaningless tickets for every single customer call they fielded, won the “Extra Mile Award”.
Can’t help but wonder how many tickets ol’ pal opened up over the years.
What happens next when this happens in sales though?
- Outreach turns generic, even desperate to hit the number.
- Meetings get booked without merit to hit the number.
- Pipeline is padded, then pushed from month to month.. year over year to hit the arbitrary number that doesn’t pay anyone’s bills.
- Revenue tanks, but dashboards stay green because nobody hit their number but everyone.. hit.. their number?
Over time, this mindless drone type of behavior affects morale and, if left unaddressed by leadership, becomes company culture.
Salespeople (and others) learn to optimize their personal optics over being a genuinely effective team player who understands their actions have a significant downstream impact on the customer journey and the greater business.
In sales this is commonly referred to as, “selling to your comp plan”, and the top-tier sellers identify and maximize on these loopholes the most effectively.
The Ethical Fallout
Reps under great pressure inflate numbers. Managers under immense pressure then tolerate it. Leaders under extreme pressure call it “momentum”.
Eventually, the entire RevOps becomes a house of cards. This happens because the system incentivized fabrication and manipulation to achieve singular metrics, instead of driving trust and long-term efficiency (aka return customers).
So… What Should We Track Instead?
If you want to leverage Goodhart’s Law instead of lamenting it, measure what matters: Quality and Trust.
Quality of Action > Quantity of Actions
• Did we seek to understand our prospect’s point of view?
• Did we lead with professional curiosity, or a script?
• Did the client thank US? Before they even bought?
Trust Metrics you can start tracking today:
• % of clients who return after the initial sale (by rep)
• % of clients who provided referral following implementation (by rep or manager)
• Average client tenure, measured (by manager/leader)
Essentially if it’s hard to fake, it’s probably worth tracking.
The sales world needs braver leaders who reframe for their teams what a “win” really looks like. Sales targets aren’t all fake news, but unmanaged or unfairly reviewed, they become cultural time bombs.
So there you have it… that’s the quota conundrum: We lose the very outcomes we were hunting the moment we treat the metric as the mission.
As you think about your own KPIs this week, are they measuring what matters.. or what’s easy to count?