Embrace the Zero When You Don’t Have the Data

We hear a number of reasons for why performance target-setting efforts grind to halt. Among the most frequent is the lack of data or lack of confidence in the data. While it is always better to have data or better data, our suggestion is to embrace the zero!

Zero is the only whole number that is neither positive nor negative, but that doesn’t mean it is without value. Zero enables us to recognize the absence of something. In fact, according to Robert Kaplan, a Harvard math scholar who wrote a book on the topic, embracing the zero is an important concept because “we derive all the counting numbers from zero…from nothing.”

Zero acts as a critical reference point. When it comes to measuring performance or measuring anything, if you start with zero you create a point of reference from which all your subsequent measurements are made. People who use measuring instruments or gauges in the physical world understand the importance of calibrating to zero; the zero point serves as the reference dimension to which dimensions on the physical parts will be compared. A reference point is what enables and ensures repeatable performance.

Zero also enables measurements to be compared to a standard value. When you can compare your measures to a standard value, you gain the ability to determine accuracy. This is why machinists and others who use measuring instruments recognize that “zeroing the gauge” is the very foundation of good measurement practice.

How to Start with Zero to Set Performance Targets

The same holds true for those of us in business responsible for setting performance targets, whether it’s net new customers or a gain in market share. When you do not have baseline data, embracing the zero enables the organization to address data quality issues and still set targets that reinforce performance expectations. With this approach, the focus is on achieving the target regardless of the starting point. We’d recommend setting an achievable initial target high enough to spur growth.

There are two primary benefits of this approach with regards to target setting when you lack baseline data. First, when you set the target by embracing zero as your reference point, you will deliver some usable value that your organization can both learn from and build upon. Second, because when you don’t need extensive data to create the performance target, action is the focus. When you establish a performance target using zero as your reference point, the target is based on what the organization needs to realize the desired results. The target, rather than data, informs the team of the work that lies before them.

For example, you have added a new solution to your portfolio and lack data around propensity to purchase among existing customers. You can set a performance target of a percentage of specific customers needed to adopt the new solution based on desired results. The same idea holds true for entering a new vertical or region where you are missing baseline market penetration data. Use the business case to set your performance target.

The takeaway-avoid letting the lack of data keep you from setting a performance target. Performance targets are essential to proving the value of your work. When you embrace the zero, it creates the opportunity to focus on developing a strategy and the associated implementation plan to achieve success. You can then use what you’ve learned to quickly iterate and set the next performance target.