On The Other Side ep 30 - DAO Mini-Series: KPIs in DAOs
Primer: How should you think about KPIs? Chase Chapman speaks with Aaron Dignan and Rodney Evans from the Brave New Work Podcast about the weaknesses of KPIs and the way to move forward.
Thoughts On KPIs
Rodney thinks that anything that sounds like a KPI or smart goal is very likely going to fall into the trap of a complicated solution in a complex environment
KPIs presume that there is measurable value inside any statement. This will fall apart as people are trying to measure something before they even start something
What Is The Role Of KPIs?
💡 Rodney presented a real life example to illustrate her thoughts on KPIs.
Uses hiring as an example
KPIs could be used for hiring:
Cost per hire
Number of hires
This goes back to the question of what the hiring circle is meant to do. The focus is on the “why”
When she started a hiring circle at her company, the main purpose was to figure out what the future of work version of hiring was
“What is the hiring circle really meant to do? Is it a body shop? Is it meant to just produce human beings regardless of fit or quality or pacing or learning or changing the kind of members that we think we need over time? And so rather than starting with how many or a quantifiable outcome, I would start with the principle of what is this hiring subDAO trying to do?”
- Rodney Evans
Measuring The Success Of Hiring For The Future Of Work
When someone runs an organization based on instrumentation, they are creating a model of reality
All models are wrong, but some might be useful
Goodhart's law: when a measure becomes a target, it ceases to be a good measure
People will try to game the measure and it will run astray of what the measure is actually trying to do at an impact level
There’s a Dutch healthcare organization called Buurtzorg that embodies this philosophy
In traditional healthcare, everything is KPI driven
The founder of Buurtzorg realized that what nurses and healthcare providers really want to do is to help people get back on their feet, not to treat patients as KPIs to meet
They got rid of all the other measures and told their nurses to focus on this bigger goal of helping people
Without KPIs, Is There Still A Case For Measuring And Tracking Things?
Aaron brought up the episode about marketplaces:
How does one tell whether a hiring circle is doing a good job?
People have to get their needs met
There has to be a feedback opportunity or survey for people to provide data about how it’s going
Rodney does not have a problem with tracking things. It’s just human tendency to turn data into a target/benchmark to be exceeded
“Too often the data becomes the outcome, or like the objective, or the goal. And it's like, that is where it gets very screwed up.”
- Rodney Evans
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