Notes to Myself - Impact vs Effort

Found this on LinkedIn.  From his blog on Everyday Leadership. 

Impact vs. Activity


David Driftmier
Global Delivery Lead at Quisitive
13 articles Follow
February 25, 2021


Talent Management. Reviews. Fitness Reports. Evaluations. Regardless of name, organizations everywhere spend tremendous amounts of time and energy assessing their people. Approaches to doing so vary wildly. I spent years watching the people review system at the company for which I worked change and evolve over time – mostly for the better. The various approaches to performance management are beyond the scope of this article, but I will instead focus on one important aspect – impact. Focusing on actual impact may seem like a no-brainer, but in decades of conducting one-on-one performance evaluations, the most common mistake I witnessed was the tendency of both individual contributors and managers to focus on activity and not impact.

“You can’t manage what you can’t measure” is a common management maxim and while basically true, it often leads people to identify only obvious and easy measurements. These measurements are often activity-focused and not impact focused. A common metric, for example, among marketers is “butts in seats.” It may show up in a performance review like this:
"This fiscal year, I conducted 54 awareness events attended by 3,456 potential customers."

Sounds good, right? This person touched a large number of people and presumably good things happened. The problem is this statement measures activity and not impact. Perhaps the events had poor content, leaving the attendee less inclined to purchase the product. Hopefully not, but left with only a statement of activity, there is no way to tell the true outcome. So, what does an impact statement look like opposed to an activity statement?
"This fiscal year, I conducted 54 events that resulted in attendees being 23% more likely to buy from Acme Chemical and driving $450,000 in incremental revenue."

$450,000 is impact. 54 events is activity. The employee in this example correctly connected the two. While this is a straightforward concept, failure to follow it is incredibly common. Why? Three reasons:

1) When someone works hard, they want to be recognized for that hard work. This often shows up in statements such as “I averaged 50+ hours/week this year.” Or, “I gave up my vacation this year.” While working harder may result in more impact, it isn’t always so.

2) Activity measurements are easier to identify. In the example, the number of events and attendees is a readily-available and straightforward measurement. Teasing out the actual business impact may take additional effort and analysis.

3) Business or mission impact can be difficult to quantify or prove. A product launch is a classic example. If a new product is wildly successful, is it the result of brilliant design, a stellar advertising campaign, an extremely efficient distribution channel, or superior manufacturing? Isolating the true drivers of impact can be difficult. During the lifecycle of the product or service it may be easier to adhere to the “change only one thing at a time” approach that makes isolating changes more straightforward. Finally, the common pitfall of correlation versus causality often occurs. “I worked an average of 10 hours of overtime per week, resulting a 15 cent increase in earnings per share at Enormous Corp.” Nice try, but proving causality for that one will be difficult.

Good leaders work this problem from both ends. When managing the performance of others, they work with their teams to ensure their goals reflect business impact and not simply activity. When discussing performance with individuals, they work to identify impact statements versus activity statements and help the team member understand the difference. When the leader’s own performance is being evaluated, he or she works to ensure they only focus on the impact they had on the mission or business and not on their own activities or effort. Most of us would readily agree that we would rather have someone on the team who sells more, produces more, or is more creative, than one who is simply always busy. Make sure both your words and actions line up with this desire.