Revisiting an Old Truism…

Yesterday, I posted the following to my twitter followers:

“Still amazed at the brilliance and power of the simple phrase ‘what gets measured, gets managed’ “

While I  enjoy a good truism from time to time, I generally don’t like being bombarded by them all day long by the myriad of tweeters who feel compelled to “carpet bomb” me with unsolicited life skills at the rate of about 3-5 per minute. I’m sure you can relate.

But last night, I really couldn’t restrain myself, because as I was in the middle of reviewing a performance report (from one of my clients who is just starting on their Performance Management journey), I began to ask myself why certain metrics were outperforming even my boldest expectations, and it was happening so quickly. I began to challenge myself: What did I do differently to inspire this level of performance? (yeah right!) What was the manager or team doing differently in the way of practices or approach? Was there something wrong with the metric or the data?

And then, just like that, the “moment of clarity” hit me like a ton of bricks. Maybe, just maybe, that old management “buzz phrase”- the one we all quote so much as Performance Management practitioners- really does work! What gets measured, really does get managed!!!

I shouldn’t have been surprised, because I genuinely do believe how important tracking something can be to the end result- hence, I have always “bought in” to that old truism.  But I was. Not by the fact that measuring something influences the outcome in a positive way, but by the degree to which it overshadows every other part of the Performance Management equation.

In an era where there is so much discussion on  visualization (dashboards, scorecards,…), process improvement (LEAN, Six Sigma, BPM), technology integration, leadership, culture, analysis, modeling tools, appraisals, reward structures, et al.,-I am convinced that the incremental value they each add individually, pales in comparison to the basic fundamentals of MEASURING and TRACKING.

There is no doubt that the best and most successful EPM processes out there have most if not all of the “other” tactics and components listed above. But most would tell you that the most important driver of their success was the decision to start measuring, and the sustained commitment of leadership to embed that simple discipline into the culture. Things like automation, data quality, modeling, reward structures were all secondary to the equation.

Now, since we’re putting so much emphasis on the measurement and tracking part of the EPM solution, let me say a little more about what I mean by “measurement”. Just because it doesn’t carry a huge monetary price tag, doesn’t mean it can’t be applied incorrectly. Doing it right involves several things, often best done in the sequence suggested below:

  • Ensure the “manager” and “performer” both care (at some level) about the outcome desired- it doesn’t have to be “to die for” levels of passion and excitement, but it has to be something that is important to both players
  • Establish a  key metric that measures the result, and if you want, a few (2-3 tops) that would be good indicators of intermediate success (things that would be drivers or enablers of the outcome)
  • Collect some data and establish a baseline- get a feel for where you are and where you’ve been
  • Set an initial target, but don’t get too caught up in it. You will probably change it after you better understand the dynamics at play. All your target is initially is a “stake in the ground” to get the process started
  • Start tracking the metric. Don’t over complicate it. Excel is fine for now, If you have to use a sheet of paper, a flip chart or a cocktail napkin, so be it. The important thing is that you start tracking it.
  • Make the results visible. Post them on a wall.  Let your team see you look at it and update it.
  • “Talk it up”. Recognize achievements. Modify targets. Talk about gaps. Celebrate successes.

As you can see, it’s more than sitting in your office and studying data. And it does begin to touch some of the things I referenced earlier like leadership skills, reporting and communication, etc.. But it doesn’t require a multi million dollar investment and successful completion of the whole EPM platform before you can start producing visible results.

Once you get traction, you’ll see that there is more potential in front of you. That’s the time to start adding the other pieces to the mix. At that point, you will have demonstrated some initial results, so making the  case for the type of refinements necessary to fully leverage EPM within your company becomes much easier. As this occurs, the investment will undoubtedly increase (in proportion to the benefit potential of course), and the need to effectively orchestrate multiple functions and stakeholders becomes more and more essential. Building an EPM structure that captures all of the potential value in the business is a long journey that requires deep commitment from the organization.

But the measurement part, by itself, can drive significant improvement. We’ve seen it over and over again with our clients. Will it capure the full magnitude of opportunity out there?  No. But it will get you started down the right path and it will build a basic skill that will become more and more critical as you go further with your EPM process. Few of the other tools and components mentioned above, if individually applied, would make anywhere close to that kind of difference.

Too many companies make the mistake of avoiding important initiatives while they wait for leadership to make the “big plunge”. They view change as impossible until leadership demonstrates their commitment in the form of that big investment in new tools, technology, people, etc. But that’s not how successful companies did it in the eras that preceded us. And there are many companies succeeding today to varying degrees without these big investments. Sure, success is relative to potential, and while they may not be achieving 100% of it, they are achieving infinitely more than the company that sits and waits.

The analogy I’ll leave you with is the golfer or tennis player who wont commit to significant improvement until he gets the new racket or latest clubs on the market. But we all know how flawed that logic is, and it gets reinforced for me every time I get beat by a more seasoned golfer who is playing with that 40 year old set of steel shafted blades, and drivers with weathered wooden heads.

Assignment for today- pick an area you want to improve and start measureing it. Give it a few weeks and see how it goes.

Oh..which reminds me…its time for the daily “weigh in”- oh crap!!!

-b

Author: Bob Champagne is Managing Partner of onVector Consulting Group, a privately held international management consulting organization specializing in the design and deployment of Performance Management tools, systems, and solutions. Bob has over 25 years of Performance Management experience and has consulted with hundreds of companies across numerous industries and geographies. Bob can be contacted at bob.champagne@onvectorconsulting.com

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  1. #1 by Redge on February 18, 2011 - 8:29 pm

    Hi Bob, I agree with the content of your post. I felt compelled to add another factor, the Hawthorne Effect. Increased or renewed attention will almost always influence initial results. As always, the qualifier now is “sustainable performance”.

    I also encourage “measuring what matters”. Results should influence behaviors and actions.

    If changes are prescribed to improve performance, my challenge to the team is to predict the increase and state the reasons / rationalize why that increase should be attainable. We then set that as the target. The real learning begins when we attempt to rationalize the variance from the target (good or bad) after implementation. (PDCA at the micro level).

    Great post! @Versalytics.

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