The Cost of the Wrong Number
How an unreliable metric finds its way into a board decision, and a practical way to check it.
Every board I've presented to has, at some point, made a decision using a number nobody could fully explain. It came from a presentation, prepared by a team using figures from a system. But nobody in the room had followed it all the way back to its source.
Where it goes wrong
The problem is often in the joins, filters and assumptions behind the number: what counts as an active customer, a paying customer, someone who's churned or something that's live. Those definitions may have been set months earlier by people who've since left. The report continues to run, even though nobody can quite explain the choices behind it.
Before your next board pack
Choose one headline metric and trace it back to its source. If you can't do that in an afternoon, take another look at how much confidence you're placing in it.