Executives speak the language of numbers. With success often defined by profit and loss, the numbers motivate and determine focus. But what happens when executives begin drowning in figures and data? Large-scale change efforts can get lost in the noise, leading to exhaustion and burnout.
In these situations, meaningful data — not more data — is what is needed. We must measure only what matters: the results that reflect the organization’s current strategy and purpose.
In her book, Prove It! How to Create a High-Performance Culture and Measurable Success, management consultant Stacey Barr outlines some common fallacies in measuring organizational performance. Though such measurements should be evidence of success in turning intangibles into realities, she writes that most measures only deliver:
- The easy stuff: where data is readily available.
- The traditional stuff: what we've always measured.
- The obvious stuff: the resources we use, the effort we put in, and the widgets we produce.
- The popular stuff: The measures that everyone in our industry seems to be measuring.
What we don't measure well — or at all — is results. We don't measure the outcomes, impacts, effects, results and benefits, return on investment (ROI), or the difference our organization is making. We focus too much on measuring what we do, not the results of what we do.
It’s Not a Question of Smarts
Executives are smart people. So are scientists. Though it is always dangerous to generalize, these groups tend to approach data in different ways.
Scientists don’t assume an experiment has worked until evidence — data — is collected to validate or invalidate the initial hypothesis.
Smart executives realize that evidence, or data, has allowed them to gain the experience, intuition and wisdom needed to make effective decisions. Evidence informs good leadership. Unlike scientists, executives often cannot wait to test a hypothesis before making a decision. The measures that matter are those that indicate whether a decision has led to a successful outcome, or something less than success. Deciding how success is defined is crucial.
Define the Intangibles
Until intangibles — like innovation or improved efficiency or hiring smarter — are observable or detectable, measurement is pointless. If we are to create meaningful measurement, we begin by describing how those intangible things may be observed or detected in the real world.
A good place to start is with naming the desired real-world results: What benefits might we see from improved efficiency? That makes it easy to then work backward to measure results. Then, you can answer with the initiatives that are needed to bring about those desired results.
For example, if our desired result is the intangible to recruit great employees, it might start with defining what we mean by “great.” Is a great candidate someone with the credentials and skills necessary to jump in and contribute right away? Or could great candidates be people with high GPAs, perhaps indicating intelligence and willingness to work hard? Or could great candidates be defined by positive attitudes and a willingness to learn?
Answers to these questions define criteria needed to measure success. Perhaps we want a mix of high-skill and high-potential individuals. What ratio would be realistic? What initiatives might be necessary to launch such a recruiting campaign? Finally, what are the numbers that define success?
Three Steps for Clarity
Barr relates some battle-tested experience in her book. With demands for accountability among senior executives greater than ever, she suggests three steps as a pathway for effective leadership.
Step 1: Rewrite goals to say what you really mean. That doesn’t mean dumbing it down. Instead, make the goal as clear and concise as possible, removing all ambiguity and preconceptions.
Step 2: Define what evidence proves a goal is being accomplished. For example:
- Many teams are conducting experiments.
- If successful, these experiments will improve performance by large margins.
- Minimal time passes between successful experiments.
Step 3: Quantify the evidence. For example:
- Set desired percentages of work teams with active experiments.
- Identify the desired number of experiments in progress or completed during a given period.
- List average times between experiment start and performance improvement.
It Has No Meaning Until It’s Measurable
Our world is filled with intangibles. Describing how we observe and detect intangibles requires common agreement.
Keeping change management programs on the right path and getting the best value from this significant investment requires strict focus on the measurable and the achievable.
What is the surest way to waste valuable time and resources in an organizational change effort? Premature changes that lurch about in response to noise or momentary blips in the data. These can waste time and valuable resources.
Proper execution and effectiveness of change management programs requires focus to stay on the path and the discipline to maintain that sponsor focus and take each initiative to completion. Measuring the right things is the only way to effect meaningful change.
People change management can help organizations adopt to a new normal, even in unprecedented times like these.
This post is part of a series explaining the value of change metrics to utility leaders, change practitioners, transformation executives and process professionals. Learn more: