The Three Keys of Good Measurement

You can’t manage what you don’t measure. It’s a commonly accepted maxim. However, while measurement is useful, it is understanding that’s important. “You can’t manage what you don’t understand,” would be a wiser saying. Of course, understanding needs to be informed by measurement in many cases but it requires much more than measurement. If you want measurement to enable you understand your business, the following guidelines are key:

1. Be Selective

Measurement can be wasteful – just because you can measure something doesn’t mean you should. The best organizations are selective in what they measure. You should only measure what is both important and meaningful. If you can change something, then measuring it is meaningful. If it’s something important then it might be worth measuring. In all other cases, you should not invest the time and resources to measure it.

2. Be Careful

Measurement influences behaviour so be careful – you get what you measure. This is why measures introduced to improve productivity in call centres have become the stuff of legend. Wanting to measure efficiency, call counts and measures of call duration were introduced, resulting in many unhappy customers whose calls were answered only to have the person hang up a second later without even talking.

Measurement can also introduce fear – which impacts motivation, productivity, and innovation – and which also skews data, making it unreliable. For example, most businesses would like to have reliable customer feedback as it is important strategic information. However, if staff feel customer complaint data is used punitively, then it’s a challenge for the business to get reliable data. To combat this, only measure to gain an understanding of performance and ensure that everyone is aware of this.

3. Be Holistic

All too often when measures show an organization is not performing as well as desired, management address the issue by changing people, not the strategy or the process. While sometimes this may be the correct course of action, strategy and process should always be evaluated before action is taken. Acting to improve performance before understanding the cause of the performance, almost always makes things worse. To facilitate understanding, differentiate between “process performance” and “people performance”.

Keeping these guidelines in mind, it is possible to have measurement support understanding and to avoid some of the pitfalls that can be associated with poorly thought-out measurement systems.

Measurement

On leading change

To change is to become different. In Japanese, the word for “to differ” is chigau. What makes this worth mentioning is the Japanese word for “wrong”. If you haven’t guessed already, here’s a hint – you’ve seen it already… it’s chigau.

Without much thought, it’s easy to see why people might think the Japanese believe that change is wrong.

Far from being wrong, change is both necessary and can be very positive. Of course, nobody likes having change imposed on them. If I were to rearrange your kitchen while you were at work, so you found pots when you opened the press to get a coffee mug, you would be upset. However, if I was to take you shopping for new living room furniture and a next generation television on my dime, the result might be different.

Change

Why? Part of it might be because I’m investing to make your life better but the same could be said of the time I spent arranging things more logically in your kitchen. The main reason is because you are involved in the change.

I’ve worked in one organization where over 10% of its people globally were working on a major strategic change initiative. It was a huge number but it still left thousands of the people uninvolved, in danger of being the people who couldn’t find the coffee mug as things were changed without their knowing. Running the business, looking after customers, and generating revenue are important responsibilities. It leaves a sour taste in the mouth – nothing like good coffee – to have been working hard on these tasks only to find thing changing around you without knowing why.

This makes it incumbent on leaders to find ways to involve these people and give them a voice. It also makes it incumbent on those working on change to champion it and communicate what’s happening to their colleagues.

Contrary to what one might think having learned the meaning of chigau, the Japanese don’t think that change is wrong. Indeed, they embrace it and all change together as is evidenced by the massive national best practice benchmarking programme they undertook in the early 1900s that changed Japan from a feudal society into one of the world’s most advanced and successful nations.

Should change initiatives ever be hidden from those who might oppose them?

The question makes the implicit assumption that the change would be positive for the organization as a whole even if not for all stakeholders. And, it’s very broad.

Does it include small changes that would force top management into micromanagement if they were to be involved or only more significant change? Does it mean hiding initiatives from political opponents in senior positions of power or from other stakeholders such as customers, partners or the organization’s workforce? exactly is been hidden – the fact that change is being considered and options are being evaluated or the fact that a decision has been made?

Irrespective of the details, the short answer is “no”.

I believe that in order to be a good leader people need to be able to trust you. Hiding change initiatives from those who oppose them undermines your trustworthiness. This makes my position not simply an ethical stance but also a pragmatic one.

Leaders (at all levels) need to respect an organization’s people. This includes those with conflicting opinions and, indeed, it is often these opinions that need to be heard and evaluated to ensure the implicit assumption is correct.

I’ve led change in different industries, in 9 different countries/cultures and, while it has seldom been easy, I have found that being open is the best approach. Rather than keep key opponents to change in the dark, include them. Listen to their concerns and involve them in making the change happen. This has the following effects:

  • If they have legitimate concerns, they are heard and can be taken into account
  • They have less time “outside the room” to work an undermining the initiative
  • As things progress, their involvement detracts from their ability to oppose the change

Don’t compromise on objectives or timelines (unless it really makes sense) but stay open to strategic learning. You won’t always win over opponents but that’s not the objective, the objective is to implement the change.

On Benchmarking

Last week I presented at the 1st International Benchmarking Conference in Tehran. It was an interesting experience – and one which taught me quite a lot about our host nation.

I gave the opening presentation, so my theme was broad. While preparing my presentation, I decided to provoke some thinking so, rather than expand on the merits of benchmarking, my approach was to give examples of the risks of benchmarking without adequate thought. Specifically on:

  • What to benchmark
  • How to benchmark
  • How to interpret benchmark information
  • How to communication and share benchmarking findings

The key message was that benchmarking is a great tool but it needs to be used properly. I summed it up as “a hammer is a great tool but if you use a hammer to brush your teeth, you won’t have much to smile about”.

high-jump

Great care needs to be taken when benchmarking to ensure you benefit and don’t harm your organization. If you would like to learn about benchmarking or face a challenge where you think learning best practice could help, get in touch with the Institute.

The 3 most important parts of leadership

So simple even a child can think of them….

Yesterday, my 11 year old was appointed as a sports leader for her “house” in school (the whole school is grouped into 4 houses). Last night, I asked her what she thought the most important things for her to do as a leader were.

She thought for a few seconds then replied: “encourage, help, and inspire”.

  • Encourage
  • Help
  • Inspire

While I would reorder the list to put inspire first, I think she fairly much responded with a model answer. Can you choose a better three?

Most leaders in business, however, spend too little of their time doing these things. If you spend most of your time on management, on command and control, are you failing to lead?

Use governance to differentiate

EY’s 13th Global Fraud Survey (new tab), published a few weeks ago, found that 11% of CEOs are willing to misstate financial figures. As this is both unethical and illegal, this is the equivalent of finding that over 1 in 10 CEOs are not fit for their jobs.

7% of CFOs (and other senior financial roles surveyed) and 3% of General Counsels were also willing to misstate financial information.

One consequence of this lack of integrity is that it makes it more difficult for all organizations to earn the trust of their people, customers and other stakeholders. Nonetheless, the findings will trigger no action in most organizations (even when leaders are aware of the EY survey).

This apathy results in a missed opportunity to differentiate and win some hard earned trust by working to enhance the organization’s governance not for the sake of compliance but for leadership. Leadership that earns trust and builds brand equity.

Why not be one of the few organizations that responds?

Integrating Excellence Assessment with Strategy

A few years ago, some of the large European organisations that had used the EFQM Excellence model for a number of years to systematically drive improvement wanted to find ways to integrate Business Excellence with their strategy so that it moved from being a “project” or “program” to becoming just a part of how they did business.

Ideas suggested ranged from having incentive bonuses for improving assessment scores to systems of ongoing training. In my mind it was clear. The best – if not only – way to successfully achieve the objective was simply to focus on the organization’s results. The way people influence an organization’s results is by acting on the things that enable them (“enablers” in EFQM terminology), one of the central concepts of business excellence.

Assessment Strategy Integration

Once your people realise that the optimal way to manage and improve results is by working on the enablers (the 7 BEX Excellence Framework criteria to the left of results), business excellence becomes integrated with how you do business. To integrate it with strategy formulation, you only need to ensure that the output of Excellence Assessment – the list of strengths and prioritized areas for improvement – is available as an input for strategy formulation.