In 2001, Neal Patterson, CEO of Cerner Corporation, woke up angry.
He asked for the parking lot data to find out how many of his employees were arriving before 8am and leaving after 5pm each day.
The data showed low volumes of cars across each. In his mind, this meant one thing: his people weren't working hard enough.
So he did what a lot of founders do when they feel like they're losing control.
He fired off an email.
At 6am, every employee at Cerner got this message:
"We are getting less than 40 hours of work from a large number of our 'employees.' The parking lot is sparsely used at 8:00 a.m.; likewise at 5:00 p.m. As managers, you either do not know what your employees are doing; or you do not care… Hell will freeze over before this CEO implements another employee benefit in this culture.
I am tabling the promotions until I am convinced that the ones being promoted are the solution, not the problem. If you are the problem, pack your bags. I think this parental type action SUCKS.
However, what you are doing as managers, with this company makes me sick...Something is going to change. I am giving you two weeks to fix this.
My measurement will be the parking lot. It should be substantially full at 7:30 a.m. and 6:30 p.m. The pizza man should show up at 7:30 p.m. to feed the starving teams working late...You have two weeks. Tick-tock."
He threatened to cut benefits, reduce the workforce, and make everyone's life significantly harder if things didn't change.
The email leaked and hit the press within days.
The Impact
Cerner's stock price dropped 22% almost immediately.
Not because of a product failure or a missed earnings target.
Because investors looked at that email and thought: this company is run by someone who confuses attendance with performance.
And they were right.
Our Takeaway
Neal Patterson wasn't a bad CEO. Cerner went on to become one of the largest health IT companies in the world.
But this moment reveals something that trips up almost every founder I work with...
When you measure the wrong thing, you get more of the wrong thing.
Like Munger once said, you have to be crystal clear on the right incentives.
Patterson measured attendance. So that's what he optimised for.
But attendance doesn't create innovation.
It doesn't improve product quality.
It doesn't drive revenue.
What it does is create a culture where people show up, sit at their desk, and do the bare minimum while looking busy.
This is Goodhart's Law in action:
“When a measure becomes a target, it ceases to be a good measure.”
And it's everywhere. Not just in parking lots.
How To Apply This To Your Business
Beware of the incentives you set.
Do any of these feel familiar?
1. Revenue targets without margin targets
Your sales team closes deals at any cost. Discounting becomes the default. You hit your top-line number but your actual take-home is shrinking every quarter. The team celebrates while cash flow gets tighter.
2. Activity metrics without outcome metrics
Your team logs 50 sales calls a day. They send 200 emails a week. They're drowning in dashboards showing green numbers. But conversion rates are flat. Pipeline quality is garbage. Everyone's busy. Nobody's productive.
3. Headcount as a growth signal
You hired 10 people last quarter so the business must be growing, right? Not if revenue per employee is dropping. Not if those hires don't have clear ownership of outcomes. Headcount is a cost. Output is growth.
4. Hours as a proxy for commitment
This is the Cerner trap. If your culture rewards who's in the office longest, you're selecting for endurance, not excellence. Your best people, the ones with options, will leave first. The ones who stay will be the ones with nowhere else to go.
This isn't about abandoning metrics.
Every metric you set is a signal to your team about what matters.
Choose carefully, because they will optimise for exactly what you measure.
Nothing more. Nothing less.
A System You Can Implement
Neal Patterson's parking lot email didn't fail because he cared about his team's effort.
It failed because he picked metrics that measure motion instead of progress.
Here's the difference:
Motion Metrics | Progress Metrics |
|---|---|
Cars in the car park | Revenue per employee |
Calls made | Deals closed (at target margin) |
Emails sent | Reply rate & pipeline velocity |
Headcount growth | Output per team member |
Tasks completed | Customer outcomes delivered |
Meetings attended | Decisions made & shipped |
Progress > Motion
Choose the progress metrics that will let you know whether the machine is working.
Revenue per employee is closer to the real thing.
Customer retention is closer still.
A team that ships great work, keeps clients, and grows margin without burning out?
Give me that every day of the week.
They are the metrics that will move the needle.
Thanks for reading this edition & welcome to all the new subscribers from Elite Team Tactics this week 👋
Drop me a reply to let me know what you thought… I read every email and it really shapes the future topics that will be most useful for you!
Coming Soon
Most founders I speak to are working harder than ever and still not scaling fast enough. The gap is almost always GTM.
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