Tilted On Outcome!

“When a measure becomes a target, it ceases to be a good measure”.
Goodheart’s Law*

“We often think of tech as a net positive but without strong discernment, relying on data flows and their source algorithms can result in wasted time and effort—blinding us to potential opportunities and reinforcing habitual patterns of action and thinking that may no longer serve.” Solving for Discomfort: Avoiding the Road to Nowhere (https://msboutdoor.wpengine.com/road-to-nowhere/)

If we are very interested in setting and meeting KPIs and/or identifying an ROI we have become tilted toward an outcome or result, such as a cost per conversion or number of sales within a period.

At MSB, we try (with varied success) to not be results oriented. We try instead to support processes that allow for the exploration of as broad a swath of the outcome space as possible—leading to improved results over time. This isn’t easy, the internal and external resistance to let go of “measurable results” is understandable—especially when the offered alternative is necessarily unclear.

working at desk with papers

Photo by Firmbee.com on Unsplash

Avoiding a narrow definition of success

A narrow definition of success means variance from the metric a). produces no insight and b). looks like failure. Paraphrasing Goodheart, if the metric is the target, then the results are potentially meaningless. At the very least we will be unable to develop a robust evaluation of what happened.

In the world of business, success is often defined by a single metric, such as revenue, profit, or market share. However, this narrow definition of success can lead to problems.

First, it can produce no insight. If a company’s only goal is to increase revenue, then it may not be interested in understanding why revenue is increasing or decreasing. This can lead to missed opportunities to improve the business.

Second, it can make variance from the metric look like failure. If a company’s revenue falls short of its goal, then it may be seen as a failure, even if the company is still profitable. This can lead to unnecessary stress and anxiety for employees.

As Goodheart said, “if the metric is the target, then the results are potentially meaningless.” This is because a narrow definition of success can lead to a focus on short-term results at the expense of long-term goals.

For example, a company may focus on increasing revenue in the short term by cutting costs. However, this may lead to employee morale problems and a decrease in innovation in the long term.

A better approach is to define success in a more holistic way. This means considering a variety of factors, such as customer satisfaction, employee morale, and innovation. By taking a more holistic approach, businesses can develop a more robust evaluation of their success and make better decisions about how to improve.

Here are a few tips for defining success in a more holistic way:

  • Consider a variety of factors. When defining success, don’t just look at revenue, profit, or market share. Consider other factors, such as customer satisfaction, employee morale, and innovation.
  • Set long-term goals. Don’t just focus on short-term results. Set long-term goals that will help you achieve your overall mission.
  • Be flexible. Things don’t always go according to plan. Be willing to adjust your goals and strategies as needed.

By following these tips, you can define success in a way that will help you achieve your goals and improve your business.

The Importance of Discernment in the Age of Technology

Technology has become an integral part of our lives. We use it for everything from staying connected with friends and family to getting work done. While technology can be a great asset, it’s important to use it with discernment.

The quote “We often think of tech as a net positive but without strong discernment, relying on data flows and their source algorithms can result in wasted time and effort—blinding us to potential opportunities and reinforcing habitual patterns of action and thinking that may no longer serve” highlights the importance of being mindful of how we use technology.

When we rely too heavily on data flows and algorithms, we can become blind to potential opportunities. For example, if we’re only following people on social media who share the same views, we’re missing out on the chance to learn from people who think differently. We’re also more likely to get stuck in habitual patterns of thinking and action.

Technology can also be a major time-suck. If we’re not careful, we can spend hours scrolling through social media or watching videos online. This can lead to wasted time and effort, and it can also make it difficult to focus on the things that are truly important to us.

The key is to use technology in a way that supports our goals and values. If we’re mindful of how we’re using it, technology can be a powerful tool for learning, connecting, and creating. However, if we’re not careful, it can also be a distraction and a waste of time.

man working on computer

Photo by rafzin p on Unsplash

Here are a few tips for using technology with discernment:

  • Be intentional about the time you spend online. Set limits for yourself and stick to them.
  • Follow people and organizations that challenge your thinking. This will help you stay open to new ideas.
  • Take breaks from technology. Go for a walk, read a book, or spend time with friends and family.
  • Use technology to learn and create. Don’t just use it to consume content.

Technology is a powerful tool, but it’s important to use it with discernment. By following these tips, you can use technology to enrich your life and achieve your goals.

Let me share an example. In early 2020, we were approached by a client who had a purchase order (PO) set aside by a major retailer (that had just closed their stores nationwide, due to Covid). Faced with a significant shortfall, they asked us to help them go direct to the consumer. The request, sell 900 units in the following 90 days.

This was a new brand and a new product so, with all possible caveats in place, we set up an Ads funnel driving traffic to their website.

One small detail: the client did not remove the link to the national retailer’s website from their homepage.

As a result of the click-through traffic generated by our campaign to the retailer’s website—and the subsequent pressure that potential customers put on that retailer—the original PO was fulfilled by the retailer within 23 days of our start.

A win! Right?

Looked at from a purely D2C play, it was a failure—we only sold a few dozen units. But the unexpected outcome was a saving grace and while our efforts were anecdotally acknowledged in that outcome, our unit sales stats were, in the end, meaningless.

What if things had gone the other way? What if the purchasing process at the retailer was unwieldy and slow? What if they were risk-averse and chose not to fulfill the PO?

We were focused on only one outcome, we were only measuring one result—onsite sales. Had we measured the click-throughs to the retailer, from the beginning, what else would we have been able to do? If our scope of possible outcomes was even broader, what else could we have measured—and how would that have impacted our actions?

If you’re focused on specific outcomes you necessarily limit what can be learned. Both on the vertical axis from good to bad (0—1) and also on the horizontal axis in terms of capturing the potential of other things that might occur. When focused on a specific outcome, essentially, the horizontal axis doesn’t exist—there’s just an up and down toggle, hit the goal=good, missed the goal=bad.

It’s not that other things, other outcomes, won’t occur, just that the benefits or detriments of those outcomes won’t be measured and will therefore be invisible to any evaluation.

Bringing it all together

Here are some additional thoughts on the topic:

  • It is important to set goals for marketing campaigns, but it is also important to be flexible and willing to adjust goals as needed.
  • Marketing campaigns can have a variety of indirect outcomes, and it is important to measure those outcomes as well as direct outcomes.
  • By measuring a variety of outcomes, marketing agencies can gain a better understanding of their target audience and how to reach them effectively.

Successfully measuring success when it comes to marketing campaigns, SEO, in-person events, and other projects with somewhat vague initial outcomes necessitates long-term thinking. The long view of the example above should be read as:

  1. Marketing campaigns can have a long-term impact. Even if a marketing campaign does not achieve its immediate goals, it can still have a long-term impact by raising awareness of a brand or product, building relationships with customers, or generating leads.
  2. It is important to measure the results of marketing campaigns in a variety of ways. This can include tracking website traffic, social media engagement, sales leads, and customer satisfaction. By measuring a variety of metrics, marketing agencies can get a more complete picture of the success of their campaigns.
  3. The best marketing campaigns are data-driven. By collecting and analyzing data, marketing agencies can identify what is working and what is not. This information can then be used to improve future campaigns.

Ultimately, the success of marketing campaigns should be measured by the ability to achieve a variety of business goals, of which direct and immediate sales is only one. Organizations must define what success looks like and measure their progress toward those goals regularly. This will help ensure that marketing efforts are driving results and delivering ROI.

* Goodheart’s Law, is named after British economist Charles Goodhart, who advanced the idea in a 1975 article on monetary policy in the United Kingdom.