The most appalling behavior I have witnessed in leaders is when negotiating pay, valuation or equity. I include myself in this analysis and admit we lose our collective minds when someone quantifies our value, writes it down and offers it to us.
In a growing organization where founders and early team members feel ownership of their creation, an equity stake quantifies just how much credit one deserves. Our creativity, relationships, care, time and sacrifices are boiled down to a single figure that says “this is what you’re worth.” It rarely feels like enough.
In a manufacturing economy, stuff gets made. Variables are fixed or, at least, understandable — commodity price fluctuations, union strikes and weather can be accounted for, if not anticipated. A common definition of success can be agreed upon: we’d like to get x with y. If we get more x with less y, even better. Logical, tidy, complete, it’s a hard habit to break.
A client recently explained the business model of a company he believed to be my competitor; their “value differentiator” is quantifying human capital through standard business metrics. I nearly choked — this, to me, is the Frankenstein monster of bad ideas — ignoring complexity and drawing straight lines between ideas and output.
We’re in transition on this issue, applying historically proven management practices to irrelevant situations and suffering cultural destruction as a result. Large organizations have iterated rather than upended traditional management by metrics. Replaced tonnage of wasted raw material with percentage regrettable attrition; production per headcount with employee engagement. As simple, identifiable metrics are applied to knowledge workers in complex environments they become inaccurate proxies for the unquantifiable.
These proxies stand in for the emotional conversations we aren’t used to having at work. A bonus number for a year of one’s life; a valuation the sum of a founder’s identity. We should “leave emotion out of it” when that is an impossible task: we bring our whole selves to work but systems of measurement can not account for our layers. So, we calibrate our feelings about our place and our co-workers to the numbers we’re boiled down to.
In a world where humans are the machines and behavior is the product, the drumbeat of measurement and reward is out of synch. Let’s consider, instead, how we design for connectedness and move from:
competition => collaboration
knowledge gathering => understanding
raw execution => exploration
achievement => contribution
We must value synthesis over measurement. We must recognize those who are making sense from a mountain of content, applying knowledge to evolve their perspectives, finding opportunities in complexity. Those who are highly self aware and able to reflect and adapt their own behavior.
Humans love shortcuts. Measurement is comfortable because it reduces to the essential, purporting to create efficiency. Instead, let’s embrace novelty and experimentation, actually creating flexibility.