READ TIME: 5 minutes
Baseball is a game of numbers. Managers have pages and pages of scouting reports for both pitchers and batters. These reports tell the batter what pitches the pitcher likes to throw and location. The infield shift is becoming a norm because managers have the data on where batters most likely hit the baseball. Pitchers pitch to these tendencies.
Exit velocity and launch angle are two new-age metrics making their way into popularity. Batters and teams are willing to trade strikeouts for home runs. No more station to station baseball exists. Getting on base is still valued highly, but a home run cannot be topped.
Statisticians and mathematicians have made their way into sports in a big way. They have changed the way these games are being played. The Warriors in the NBA will trade a layup on one end for a three-pointer on the other. Football has developed into a short passing scheme rarely relying on the deep ball.
Project management has many metrics as well. Whether it is to track the progress of a job, calculate the expected value of a project, or remain under budget, project managers are tracking and controlling a lot. I do not want to talk about useFUL metrics. I want to discuss useLESS metrics. One, in particular, came to me recently.
An estimator came to me with an idea to track customer relations. He wanted the typical information like client names, location, dollar amounts, and start and end dates for accepted quotes. That was fine and dandy. What struck me as unusual was his request for ‘quote conversion rates.’
A quote conversion rate is something I have never heard of nor expected ever to hear. For every quote sent out, he wanted me to see if it was accepted or not. Per estimator, he wanted a conversion rate calculated. Someone with an 82% conversion rate must be a better estimator than someone with a 68% conversion rate.
A closer look determines the meaningless metric that is quote conversion rate:
- People do not receive a quote.
If you produce a quote, and the client never receives, does the quote really exist? Whether it is a wrong email address or an inattentive recipient, quotes can get lost. Some companies still require quotes to be faxed. Misusing a fax machine is easier than it sounds.
For the quote conversion rate, technically the quote scores against the estimator. You sent it out and did not receive the contract. You are at 0% for the day. However, if the person never received it, the metric does not apply at all. In baseball terms, you had a plate appearance but not an at-bat.
- Numbers not accepted because of the price
Many property management companies require a price list to perform work on their buildings. If we apply a similar price list to a residential home, the number may be too high. This instance does not reflect the ability of the estimator to land contracts. It reflects poorly on the price list.
Yet again, the estimator would be knocked down on his or her ratio because of something out of his or her control. This scenario represents an unfair metric.
- Owner changes the numbers at the last minute.
Many times, as the deadline is closing in, the owner will step in and raise or lower the bid depending on the organization’s needs. If the risk is too high, the price increases magically. There is no rhyme or reason behind the decision, just do it.
Also, if the owner feels like this project is great for the portfolio of the company, he or she will lower the bid based on that instinct. In either case, the estimator is at the mercy of the owner’s mind. If the bid is awarded, the estimator’s conversion rate goes up. If denied, the rate goes down. The metric, again, tells us nothing about the estimator’s ability.
Winning in sports is paramount. A pitcher in baseball gets credited with a win or loss. This team metric gets applied at the individual level making it a useless metric. A pitcher can throw nine scoreless innings yet receive a no-decision. He can give up one run and lose the game.
The win-loss record of a pitcher has a very little determining factor of whether or not this player can perform at a high level. Strikeouts per nine innings, quality starts, and earned run average are much better indicators of the individual’s performance.
Sometimes, too much data is a bad thing. There are so many metrics you can track and weigh if you sit down long enough to create them. Quote conversion rate is a great example of tracking something that has little impact on projects moving forward.
This metric creates unnecessary competition where the individual may not have control. You create frustration out of thin air just to appear cutting edge with another metric. Needless to say, I am not tracking quote conversion rates nor will I ever.
What are some of your favorite useless metrics?