Seatbelts, Metal Spikes and Metrics
Day-to-day my task is simple: find more effective ways for people to grow their businesses. Depending on the client, place and time we often fall into an exaggerated sense of urgency. This acceleration leads to shortsighted thinking and unintended consequences.
We can hedge these tendencies through proper metrics. Yes, you have to track everything. Yes, it sucks. Yes, the team will hate it. Yes, you have to do it if you’re serious about success.
Just tell the team they can stop as soon as they start paying off your loans for you. Just kidding (kind of). We have to track things to establish that what we’re doing is effective and not adversely affecting other aspects of the business.
Not that long ago cars didn’t have seat belts. As the economy grew and cars were becoming more and more ingrained with the American way of life, an undercurrent of concern grew right along with record-breaking sales.
In the 1960’s Ralph Nader wrote a book entitled Unsafe at Any Speed. As you can imagine the book called attention to several safety issues surrounding the automobile industry and a public fervor ultimately led to congressional involvement. Seat belts were now 100% mandatory.
HOORAY! Lives will be saved!!! Pats on the back all around!!!
So, did it help? Was it worth it? Were lives saved? Turns out, they didn’t really know. Everything in your heart wants to say “Well, of course it did!” Well, this is why we try and take business advice from both hearts and minds…not one or the other.
Enter Sam Peltzman. In 1975 our friend, and noted economist, conducted a study that looked into the issue. What he was able to prove was very interesting. While the lives of more drivers were saved, accidents rose sharply, as did pedestrian deaths.
Imagine you’re driving in a terrible snowstorm, how do you act? Naturally, you’re laser-focused ready for anything, expecting the worst at any moment and you’re preparing to react. Risk is very high.
Now, flip-it and your speeding along in a convertible on a perfect spring day, not a care in the world. Guard is down, risk is low.
Seat belts decreased the physical risk but removed [in part] the incentive for careful driving. Ergo, more accidents and pedestrian deaths.
To prove this, one economist claimed he could stop auto fatalities almost completely. Rather than seat belts, all you had to do was install a sharp metal spike that came out of the steering wheel and ended two inches from your throat. You wouldn’t even need speed limits.
I think I’ll walk, thank you.
When it comes to growing a business we’re always looking for ‘seat belts.’ We want ways to ensure that we’ll have stability and safely for anyone who gets behind the wheel, but not at the cost of personal responsibility. Tracker numbers have an odd way of becoming cold and anonymous and that can’t happen.
Find or develop a system that works for you. Stay consistent and I guarantee you will be rewarded. However, you will need extra gas money, for all those extra trips…to the bank.