Metrics_ How to Improve Key Business Results - Martin Klubeck [59]
The Balanced Scorecard also has four quadrants: Customer, Finance, Employee, and Process—and most leaders jump to the Finance quadrant. The nearest equivalent in the Answer Key is the Process Health (or efficiency) quadrant.
While the right two quadrants in the State of the Union require that the organization be ready, but typically the organization is not, the Return vs. Investment quadrants can be addressed before maturity. Of course, the more mature the organization, the better—especially when developing a metric program.
Process Health
The Process Health (efficiency) measures (Figure 6-5) can cause a lot of issues, especially in an organization suffering from immaturity. If you don’t have great rapport with the workforce, or if there is any lack of trust between the workers, trying to work on metrics for this quadrant can be a killer.
Figure 6-5. The Answer Key, Quadrant 2
The questions I would have you ask to determine readiness for efficiency measures include the following:
Does your workforce trust management?
Does your first line of supervision trust upper and/or middle management?
Does management trust the workforce?
To be able to use efficiency measures safely requires trust. Honest and accurate data is impossible to achieve in a culture lacking trust. Most pundits think that a culture of trust is predicated on how well the top leaders of an organization walk the talk. Does the workforce trust the top leaders to follow through? To do what they say they would? To keep to their agreements and commitments?
I find the answer to the trust question to be much more direct and simple. Does the workforce believe that their direct supervisors have their best interests at heart? They care much less about the top leader’s level of authenticity. They care about their direct manager above all else. As you move further away from the direct manager, the amount of trust required lessens.
So, rather than preach to the CEO of the company that she must gain the workforce’s trust, start at the lowest levels and ensure that there is a culture of trust from the bottom up.
When you decide to measure how efficient the organization is, your employees clearly hear that you want to measure how efficient they are. They will not “hear” that you want to improve processes and procedures. At least, they won’t unless they trust you. And by “you,” I mean their boss.
My CIO usually followed up his admonition to “do the right thing” with an equally important directive to do the right things “the right way.” If management is strong, it will seek to improve the way things are done—not improve those who are doing the work. If you rush into working with efficiency measures, you risk not only gathering inaccurate data due to mistrust, but worse, you run the risk of seeding more mistrust.
Process Health metrics require a level of mutual trust rarely found within most organizations.
Remember, Organizational Health metrics speak to the workers’ situation, which most leaders are not ready to hear. And even if the leadership believes it is capable of hearing the feedback, if there is a lack of trust, most workers are not ready to share.
That same lack of trust makes collecting accurate data on how well the business is run (Process Health) hard to accomplish.
Product/Service Health
So, that leads us to the Product/Service Health quadrant (Figure 6-6). This is not only the safest place to start, it’s also the most logical.
Figure 6-6. The Answer Key, Quadrant 1
Let’s look at the following questions, which you should ask to determine if you’re ready for effectiveness measures:
Do you know who your customers are? (This should be a no-brainer, but it’s actually worth asking. I am rarely surprised by what is not known.)
Do you know what your customers consider important?
Do you know your customers’ expectations?
Does this sound a lot easier than the other four quadrants? That is because it is. You need less maturity in the top half of the tier, and there is less risk involved in Product/Service Health than with efficiency