So the big re-org was completed last year, the new strategic objectives are in place and we are dutifully watching our dashboard.
But the company is not tracking. Now what?
Too often the metrics on which companies rely do little to diagnose problems when things go wrong. This happens because we’re never planning to fail when we’re doing the strategic planning – that’s when we’re at our most optimistic.
So failure demands better metrics. Here’s how to develop them:
Monitoring an organization occurs at three levels and requires tactics and metrics for each:
1. Implementation monitoring – did we do what we said we’d do? The metrics associated with implementation monitoring are the most straightforward but least informative; for example, “hold 4 team meetings per year.” If we expect to see improvements in communications we need to know whether we held the meetings we expected to, but that doesn’t mean the meetings achieved anything.
2. Validation monitoring – do our modelling assumptions hold? Strategic planning relies on developing models that predict outcomes. These models might be implicit or explicit. But how much time is spent examining whether assumptions and relationships hold? For example, if our defect rate declines by 20%, will support calls also decline by 20%?
3. Effectiveness monitoring – are we achieving the outcomes we want? This is where we want to get to, but the metrics are the most difficult to develop. In our experience, many just give up and default to simpler metrics that may be only partly correlated with our desired outcome. For example, “customer satisfaction” is the outcome we want, but “support call volume” is what we measure. Teams need to think deeply about customer satisfaction and what it really means.
Designing good metrics is hard. Planning to fail and stratifying monitoring requirements is a good place to start.