Reclaiming the Enterprise - 3 - Stop Counting!

We're lost, lost in a sea of numbers. The numbers have become an end in themselves. We find more and more things to count, more and more numbers to tabulate. It makes us feel good, it assuages our anxiety.

It's a waste of time!

This is another of the illnesses that has infected our organisations. I have a sneaking suspicion that it forms part of a bigger illness called MBA Syndrome.

It's the fashion to measure organisational performance, and on the basis that if measurement is good then more measurement is better we measure everything. At best it's a distraction, at worst it's just another plank to launch yet more senseless bullying and pressure. Measurers aren't managers, they're analysts.

Real managers understand that any organisation is sensitive, in a meaningful way, to a very small number of parameters. Let's be clear: by "organisation" I mean a small to medium enterprise or a division of a larger enterprise.

Let's think about this: if you are a call centre business there will be a small number of parameters that are the real contributors to profitability. I'm not a call centre guy but I'd imagine that calls per hour is one, or in a help desk environment it might be calls resolved on first contact. In a professional services organisation a key number is staff utlisation ratios - if too many of your staff are on the bench then your head is underwater. Whatever the case. It's the same for any business. I would say that 4 parameters are the maximum that any business should focus on.

A further clarification: I'm talking operational numbers - I'll explain that more soon. By all means let the accountants and the analysts measure other things, but ensure that the business is focused on the real measures.

When you measure a small number of parameters you can:

1. Make those parameters widely understood and accepted across the organisation;
2. Make the performance against those numbers widely known across the organisation;
3. Spend only a small amount of time on the measuring process and instead focus on actually doing business;
4. Ensure that the argument doesn't become one about measurement methodology rather than business performance.

The critical issue here is that, as the quantum physicists know, when you measure something you change it. The same is true of organisations. When you get organisation focus on a small number of parameters and they are the right parameters then the mere fact that everyone is focused on them will lead to improvement in performance. I've seen amazing outcomes when everybody in an organisation "buys in" to a small meaningful set of measures. Employees really start to think about how the business runs and what the drivers are. They can see how their actions and their performance affect the business.

Deciding which parameters to measure and getting that right is one of the key attributes of a good manager. Equally important is the capacity to get shared ownership of those parameters across the organisation.

There are huge benefits to such a sparse approach to measurement:

1. The team can focus rather than spreading their efforts in a scatter gun approach;
2. Management can watch the big picture - they can manage - rather than spending inordinate amounts of time sifting through reams of irrelevant numbers;
3. Employees get a buzz out of being part of the organisation. They can understand the drivers and they tend to commit to achieving. They become self managing with respect to key performance measures;
4. Where it becomes apparent that a specific area needs focus an additional measure can be added for a short period of time to "clean up" an issue. This can happen without adding to a cumbersome system - the system is neither complex nor cumbersome.

I believe that as a manager, the less you trust yourself, the more you will measure. What do you think?