Dr Larry Marshall: How KPIs Kill Innovation
How do you measure productivity and success, and is focusing on that part of the equation stifling innovation?
As we come to grips with managing remote and hybrid teams, respected tech leader and scientist Dr Larry Marshall says, “I hate KPIs”. He was speaking at Qantas magazine’s final Think. event for 2023, a dinner at Cutler & Co., where the panel discussion focused on driving motivation and innovation in a hybrid workplace.
“If you’re going to create a different future, it’s never been done before and you can’t KPI that,” explained Marshall, the longest-serving CEO of CSIRO, Australia’s national science agency, before his retirement from the role last year.
“Yes, there are methods to manage it, and yes, you can measure it. But you have to be flexible enough to change because the way you make your vision of the future happen is by recognising what the market is telling you. You’ve got to listen to it and pivot and change course until you are successful. You may fail many times on the way to doing that.”
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Marshall, currently on the board of Fortescue, said that when he arrived at CSIRO in 2015 – after working for 25 years in Silicon Valley – he discovered scientists and engineers were compelled to total up the time they spent on various projects, a process known as “effort logging”.
“Imagine a bunch of scientists, engineers and software developers trying to remember how many minutes they spent thinking about this or that invention, who it was for and filling out a timecard like someone working in a professional services firm.”
He recalled embarking on a mission to turn this around. “It took a year to eliminate effort logging and instead measure the outputs, not the inputs. We had to run both systems in parallel to prove that measuring outputs was at least as accurate as measuring hours worked.”
Marshall, who recently authored Invention to Innovation: How Scientists Can Drive Our Economy, is very clear that the location of teams should not be the focus when it comes to measuring success. “Where people do the work really doesn’t matter as long as you’re getting the outputs.” He says that adding flexibility, rather than insistence on eight hours a day in an office chair, is the secret to innovation.
Diversity is also key. “A successful start-up is one that sees a different future than all of its competitors and [is able to] create a product that enables [a new] version of the future to happen. It’s known as market vision – you can’t see the future differently by going to the people who brought you the past.”
Marshall has one final piece of advice for leaders: “The insight you need is in the heads of your customers and your people. Listen and be flexible enough to overcome your own personal biases and experiences to make the changes that you need to make all of you successful. Talk 20 per cent; listen 80 per cent.”
Think. is a thought-leadership event and content series presented by Qantas magazine and in association with LSH Auto Australia – the country’s leading Mercedes-Benz dealer group. Find out more about LSH Auto Australia.
