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A Tyranny of Measures – Measure management and Avoiding Aimlessness

Article by Phil Jones

Likely symptoms of problems

Measures should motivate, yet the measures are not changing what people do. Managers say, "I can't see the wood for the trees". Staff say, "There are so many measures I don't know what matters".

Preliminary diagnosis

There are too many measures due to poor measure design. At any one level, people are confused as to which are really important. In the end people believe that you can't satisfy all of them, so none matter, or they all matter equally lowly.

Two main problems occur, which are symptoms of underlying problems:

* Measures without objectives

* Too many measures being used at the wrong level, for the wrong reasons.

This is typically caused by not thinking through the levers of control and the message that you wish to communicate. Many get carried away and start thinking about measures and how to measure before they have decided what to measure. Its seems an easier conversation: Unfortunately it leads up a blind alley.

Case study

A major retailer used the balanced scorecard to approach help align the organisation and communicate its strategy through the organisation. They had access to enormous amounts of timely retail statistics down to lines in particular shops. However they had less control over the execution of their major strategic thrusts.

In the process we helped the executive team ensure they were clear about where the company would go and how it would get there. This included helping them create a tangible vision of how the company would look, feel and act in 3 years time.

The new, sharper Balanced Scorecard served two purposes. It provided the executive team with a much sharper focus on the changes they were trying to drive through the business. They still looked at their daily operational measures, but now they were also able to assess the progress of their strategy and the investments they were making on a monthly and quarterly basis.

Secondly it galvanised the workforce. It was the basis for cascading the strategy through the organisation down to the (approx) 2000 shops and other retail channels and the thousands of staff across the country. Today every shop has a scorecard.

Underlying solutions

Deciding what levers of control you wish to pull. When executing strategy you have to decide where the points that will make a difference are. Is it ensuring conformance and the limits of people's behaviours? Is it ensuring that the processes are operating correctly? Is it the values and beliefs of the organisation? Is it a few critical points that will make a major change to the organisation?

Decide what should be important. This becomes the focus of attention and the rest should be come exception reporting. However this process seems extremely difficult for organisations to get into and manage. Sometimes its because it becomes a question of delegation, autonomy and trust. I, as a manager, do not need to worry about this area - it is yours to manage and I trust you to do that, reporting to me when things go beyond the limits I have set.

Teasing out the things that are important, from the everyday that should be managed at another level, is the art of the process.

Good measure design naturally follows this. Working out why you are measuring, before deciding what to measure and how. This approach means that if a measure is found to be inappropriate or not working, you can change it, safe in the knowledge that the underlying message about why you are measuring is still there as a reference point. Without this, people have to guess your intention and end up at best confused, at worst misdirecting

Excitant Articles

More information on using measures to enhance performance and how to avoid the pitfalls of a measures culture.

http://www.excitant.co.uk/pages/Top_tips_bsc_overview.htm