Everyone knows the quote, “failures are the pillars of success.” However, many people don’t learn from their failures or mistakes but continue to make similar mistakes. If the mistakes progressively make a positive contribution to the overall goal, that can be tolerated. The smart leaders follow the attitude demonstrated by Thomas Edison as described below.
Thomas Edison tried two thousand different materials in search of a filament for the light bulb. When none worked satisfactorily, his assistant complained, “All our work is in vain. We have learned nothing.” Edison replied very confidently, “Oh, we have come a long way and we have learned a lot. We know that there are two thousand elements which we cannot use to make a good light bulb.”
Using the above story as an example, some leaders may be starting project after project which fail. They may even start new business unit after another and continue to fail. The major issue is that there will be no correlation or a single goal in these cases. Each case will be haphazard and will be to satisfy some selfish or fancy thinking of the leader. Sometimes, the corporate is put at risk, just so that the leader can claim credit for starting new projects. Unfortunately, the KPIs are manipulated to avoid highlighting the number of failures.
So in good companies, KPIs are important to separate the bad from the good. If someone talks of projects initiated, then another should measure the success rate. If someone talks of number of proposals submitted, then another should measure the win rate. If someone talks of cost reduction in certain expense lines, then another should measure the increases caused by the same measures in other expense lines. If someone talks of number of projects won, then another should quantify the losses. It is the net effect that matters, not the gross and smart leaders know this. The average leaders manipulate their people at the expense of the company.