Corporate KPIs and the Fixation on Data-Driven Decision-Making

In theory, Key Performance Indicators (KPIs) help corporate leaders make better decisions by quantifying and tracking the vital signs of the business. In reality, many corporate decision-makers use KPIs in at least two counter-productive ways.

  • Breathless Enthusiasts — Enamored with the broad potential of data science, these corporate warriors use KPI tools with the eagerness of a drowning man who finally manages to draw a life-sustaining breath. But, without an accompanying analytical rigor, raw enthusiasm lapses into the “Shiny Object Syndrome” whose symptoms include 1) an inability to distinguish between representations and realities, 2) a fixation on patterns observed in the data combined with a drastically diminished interest in doing the hard work — i.e., testing data-driven hypotheses and applying insights collaboratively to achieve desired outcomes.
  • Corporate “Psychos” — Like the character in the film American Psycho, these consumers of KPI tools don’t care at all about the relevance or reliability of the data behind colorful KPI dashboards. To them, KPIs are just another tool in the game of smoke and mirrors, the only game they really enjoy. So, they use KPIs (and data in general) not to reveal underlying realities, but to distort them in order to support their own political objectives. Skillful psychos use KPIs to inflate financial projections, cook the books, reward their allies, weaken their opponents and, most importantly, construct arguments in favor of increases in their own remuneration.

These perversions of data science draw a steady stream of searing criticism from “true believers” who understand that KPIs (just as surgeries and NASA missions) only serve their purpose when carefully crafted by professionals who honor the complexity of the task. Otherwise, KPIs are dangerous, just like a surgeon who amputates the wrong leg because he looked at the wrong X-Ray.

Of course, this argument is indisputable. But it is also unnecessary. We do need to educate the breathless enthusiasts and penalize the psychos. But high-minded criticism won’t do the trick, especially with the psychos. Often, satire is a much more effective weapon against inept or deceitful uses of data in corporate C-Suites. See cartoons below.

 

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