Measurement As a Framework for Strategy

Transformational measurement is key to every aspect of improvement

Published: Wednesday, May 8, 2013 - 09:43

“What if I were to tell you that one of the most important keys to your organization’s success can be found in a very unlikely place—a place many of you may consider to be complicated, inaccessible, and perhaps even downright boring? What if I were to tell you that this key to success is already one of the most ubiquitous and impactful forces in your organization? It’s there, waiting for you to tap into it. This key to success is measurement.”

No, that’s not me talking above, but my respected colleague Dean Spitzer, from his wonderful book, Transforming Performance Measurement (AMACOM, 2007). He’s a former executive at IBM, where he did groundbreaking research on “the socialization of measurement” and was a thought leader in identifying innovative performance measurement models.

I discovered his work more than 15 years ago through his excellent book on a totally different topic, Supermotivation (AMACOM, 1995), which I summarize in chapter five of my book, Data Sanity (Medical Group Management Association, 2009). We are amazed at the similarity in our thinking—and how our messages (and personalities) complement one another. He confessed to me that he is hardly a “numbers person,” but as you will see, his thinking on the use of measurement is brilliant.

Measurement needs context

Dean believes that it’s not about creating measurements, but rather creating an optimal environment (i.e., context) for their effective use. Transformational measurement leads to improvement in virtually every aspect of organizational performance. For starters:
• Improved strategy execution
• Better investment decisions
• Increased value creation and value capture from diverse assets (both tangible and intangible)
• Improved relationships (e.g., customers, employees, suppliers, partners)
• Increased synergy and synchronicity of the supply chain
• Increased forecasting accuracy
• Enhanced employee motivation and performance
• Greater organizational learning

Before you go any further, I suggest you take Dean’s transformational measurement assessment. It certainly was an eye-opener for my MBA students.

Of course your organization has good intentions

As Dean says, “Nothing is more frustrating and futile to observe than the chaos and waste that proliferates in a poorly measured organization.” I like to call this data insanity. Eradicating this activity should be a key improvement strategy; it will create the time to think about improvement strategically and integrate it into organizational DNA.

There are other consequential benefits. What if you had the facilitative skills to eliminate the following symptoms of good companies not measuring well?
• Strategy isn’t well executed because managers and employees don’t know what the strategy means for their jobs (or where quality improvement fits in).
• Operational performance can’t be appropriately managed, because management becomes (at best) a set of educated guesses.
• Priorities are vague and conflicting, and goals can’t be set because goals require the right measures.
• People don’t understand what’s expected of them, and when they do figure it out, it’s often too late.
• Managers don’t really know how well their functions, their people, and their initiatives are performing.
• There’s frenetic behavior, lots of activity, but little seems to get accomplished, and nobody really knows what is paying off, and what isn’t.
• There are Herculean efforts at problem solving and performance improvement, but problems don’t really get solved, and nobody really knows which improvements are working or what caused the problem in the first place.
• The wrong things are rewarded, and the things that should be rewarded are not.

It could be easier than you think. Dean also says, “What is most remarkable is that the mere effort to measure a difficult-to-measure construct can lead to a much deeper understanding and more effective management of that dimension or asset.”

How would you like to facilitate such new conversations, which will anchor your improvement efforts in a robust context? (What are you doing in October? Dean and I and one other colleague are in the process of designing a two-day event here in Portland, Maine, in mid-October. If you’re interested, email me for details.)

If you can create that new context and further integrate the elegant simplicity and analysis skills of “data sanity,” you will have taken yet another quantum leap in “getting the respect you deserve...” and delivering the results worthy of your highly developed, valuable skills.

About The Author

Davis Balestracci

Davis Balestracci is a past chair of ASQ’s statistics division. He has synthesized W. Edwards Deming’s philosophy as Deming intended—as an approach to leadership—in the second edition of Data Sanity (Medical Group Management Association, 2015), with a foreword by Donald Berwick, M.D. Shipped free or as an ebook, Data Sanity offers a new way of thinking using a common organizational language based in process and understanding variation (data sanity), applied to everyday data and management. It also integrates Balestracci’s 20 years of studying organizational psychology into an “improvement as built in” approach as opposed to most current “quality as bolt-on” programs. Balestracci would love to wake up your conferences with his dynamic style and entertaining insights into the places where process, statistics, organizational culture, and quality meet.